Expenditures that extend the useful life of a plant asset increase the accumulated depreciation on the asset.

Question

Quizplus · Accepted Answer

Expenditures that extend the useful life of a plant asset are called capital expenditures and are not recorded as expenses on the income statement. Instead, they are added to the cost basis of the asset and depreciated over its remaining useful life, which reduces the accumulated depreciation on the asset.

Expenditures That Extend the Useful Life of a Plant Asset