Additions to property, plant and equipment are debited to the property, plant and equipment T account. The cash paid to acquire property, plant and equipment is always the same as the additions figure in the property, plant and equipment account.

Question

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The cash paid to acquire property, plant, and equipment may not always be the same as the additions figure in the property, plant, and equipment account because the additions could include non-cash transactions such as acquisitions through exchange, donations received, or assets constructed internally, which do not involve an outflow of cash.

Additions to Property, Plant and Equipment Are Debited to the Property