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The Cost of a Major Overhaul of Equipment That Extends

Question 48

Multiple Choice

The cost of a major overhaul of equipment that extends its total useful life by five years would be:


A) treated as an expense.
B) charged to a separate asset account and depreciated over five years.
C) cause for an adjustment to prior years' depreciation on the equipment.
D) added to the carrying amount of the asset causing future depreciation to be increased.

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