A major expenditure increased a truck's life beyond the original estimate of life. GAAP permits the expenditure to be debited to:
A)Repairs.
B)Accumulated depreciation.
C)Major repairs.
D)None of the above.

Question

Quizplus · Accepted Answer

When a major expenditure increases an asset's useful life beyond its original estimate, it is considered a capital expenditure and should be added to the asset's cost and depreciated over its new estimated useful life. Therefore, the expenditure should be debited to the Accumulated Depreciation account.

A Major Expenditure Increased a Truck's Life Beyond the Original