Unformatted text preview: to increase the asset's usefulness or value, the asset account should be debited. On the other hand, if the capital expenditure serves primarily to increase the asset's useful life or salvage value, the accumulated depreciation account should be debited. Such judgments are not always clear cut, and discussions about the best way to record capital expenditures are usually covered in more advanced accounting courses. Nevertheless, you should be prepared to see capital expenditures recorded in either the asset account or the asset's accumulated depreciation account, and you should recognize that the effect on the asset's net book value is the same either way. Consider how a $10,000 capital expenditure changes the truck's net book value....
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This note was uploaded on 11/14/2011 for the course ACCT 1310 taught by Professor Staff during the Fall '10 term at Texas State.
- Fall '10