A major expenditure made to equipment that extends its useful life beyond the original estimate is journalized by
A)debiting repairs expense.
B)debiting depreciation expense.
C)debiting equipment.
D)crediting depreciation expense.
E)crediting accumulated depreciation.

Question

Quizplus · Accepted Answer

Debiting equipment is the most appropriate option as it reflects the increase in the value of the equipment due to the expenditure made to extend its useful life. This will increase the cost of the equipment and its value on the balance sheet. Debiting repairs expense or depreciation expense would not be appropriate as the expenditure is not related to repairs or regular depreciation. Crediting depreciation expense or accumulated depreciation would also not be appropriate as this would reduce the value of the asset, whereas the expenditure has actually increased its value.

A Major Expenditure Made to Equipment That Extends Its Useful