intermediate and final goods?how expenditure on maintenance of office building and improvement of a machine in a factory be treated as?why?
Intermediate goods are those goods which are used for further production of some other goods. Ex. Cotton used in textile mills to make cotton dress materials. Final goods are those goods which are for final consumption and are not used in further production. Ex.Automobiles etc.
Maintenance of office building and improvement of a machine in a factory are treated as capital expenditures because these expenditures are to ensure the long life and durability of such capital assets. They help in maintaining the condition of the asset which will ensure more production and stability.