Which of the following subsequent expenditures would be capitalized?

a. Ordinary repair and routine maintenance.

b. Costs that increase the service life of an asset.

c. Routine maintenance.

d. Ordinary repair.

b. Costs that increase the service life of an asset.

Explanation:

Expenses associated with depreciable assets are classified into two; capital expenditures and ordinary expenditures.

Ordinary expenditures are routine repairs, maintenance costs, and upkeep costs. They are treated as regular operating expenses. Capital expenditures increase the useful life of an asset. They increase the asset's net book value.

Useful life an accounting term that estimates the number of years an asset will be used cost-effectively for revenue generation. The useful life of an asset ends when the asset is expected to be obsolete, too expensive to maintain, or will require major repairs. Useful life is used in the calculation of depreciation.

Capital expenses add to the useful life of an asset; hence, they get capitalized.