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Question
Match each of the following costs with its classification and treatment (a–c) as a revenue or capital expenditure. Each term may be used more than once.
a. Ordinary maintenance and repairs to be treated as a revenue expenditure, increasing an expense account
b. Asset improvements to be treated as a capital expenditure, decreasing an accumulated depreciation account
c. Extraordinary repairs to be treated as a capital expenditure, increasing an asset account
Fixing damage due to a car accident
Answer
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