Final answer:
Most rearrangements/reinstallations and repairs are expensed, which means they are recognized as costs on the income statement in the period they are incurred, rather than being capitalized on the balance sheet.
Step-by-step explanation:
When accounting for expenditures within a company, there's a fundamental distinction between how different types of costs are recorded.
Most additions and improvements or replacements are capitalized, meaning they are added to the company's assets on the balance sheet because they are expected to provide benefits over multiple periods. In contrast, most rearrangements/reinstallations and repairs are expensed.
The correct answer to the question 'Most rearrangements/reinstallations and repairs are _________' is C) expensed.
When costs are expensed, they are recognized immediately on the income statement and can decrease the net income for the period in which they occur. This is because such costs are typically regular, recurring, and only provide benefits in the short term.