Final answer:
The cost of the delivery truck's upgrade should be debited to the Delivery Truck account as a capital expenditure, while the oil change should be debited to the Repairs and Maintenance Expense account as an operational expense. The correct answer is option c.
Step-by-step explanation:
The expenditure of $3,800 made by Noshang Co. for upgrading the delivery truck should be debited to the Delivery Truck account because it is likely to extend the useful life of the truck, increase its value, or enhance its performance, thus being considered a capital expenditure. On the other hand, the $100 spent on an oil change is a routine maintenance expense and should be debited to the Repairs and Maintenance Expense account.
When Noshang Co. upgrades a delivery truck, the company is essentially improving one of its fixed assets, which means that the upgrade cost needs to be capitalized and not expensed. Capitalizing an expense indicates that the company will benefit from it over a longer period than just the current fiscal year. Therefore, the correct answer to the student's question is option c: Delivery Truck and Repairs and Maintenance Expense.