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How do you capitalize an asset?

Answer:

Capital Items = Items of lasting value (expected life > 1 year). (Assets)
Expense Items = Consumable items whose lasting value is expected to be <1 year.

Capitalizing an item simply means it is accounted for as an asset, on the balance sheet.

First answer by ErinL. Last edit by ErinL. Contributor trust: 11 [recommend contributor ]. Question popularity: 1 [recommend question].

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