Question

Agree / Disagree? Give reason to support your answer.Repairs expenses incurred on machine are to be debited to Repairs account.​

Answer 1

Explanation:

Expenses incurred on the repair of machinery at the time of purchase of the machinery will be treated as a capital expenditure and will be debited to machinery account as it increases the value of an asset, but those repairs which are incurred on the machinery on the middle of its usage will not increase our asset value and hence they are not debited to the machinery account and hence they are debited to repair account as it was treated as a revenue expenditure .