Question

Which of the following is not an example of capitalized costs?

1) Research and development expenses
2) Purchase of land for a new factory
3) Advertising costs for a new product launch
4) Routine maintenance costs for existing equipment

Answer 1

Routine maintenance costs for existing equipment is not an example of capitalized costs.

Step-by-step explanation:

Out of the given options, routine maintenance costs for existing equipment is not an example of capitalized costs. Capitalized costs refer to costs that are incurred to acquire, construct, or improve a long-term asset that is expected to provide benefits for more than one year. Research and development expenses, purchase of land for a new factory, and advertising costs for a new product launch are all examples of capitalized costs because they relate to the acquisition or improvement of long-term assets.