The expenditure to modify an asset so that its service potential is improved should be expensed.

Name: The expenditure to modify an asset so that its service potential is improved should be expensed.
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Question

Quizplus · Accepted Answer

According to the accounting principle of capitalization, expenditures that improve the service potential of an asset should be capitalized as part of the asset's cost rather than expensed immediately. This allows the cost to be spread out over the useful life of the asset through depreciation.

The Expenditure to Modify an Asset So That Its Service