An expenditure that increases a long-lived asset's useful life should be capitalized.

Question

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According to generally accepted accounting principles (GAAP), expenditures that increase the usefulness or extend the life of a long-lived asset should be capitalized. This means that the expenditure is recorded as an asset on the balance sheet and depreciated over the asset's remaining useful life. Examples of such expenditures may include major repairs or upgrades to equipment or property.

An Expenditure That Increases a Long-Lived Asset's Useful Life Should