Question

An analysis of which of the following accounts would best aid in verifying that all fixed assets have been capitalized?

a. Depreciation expense.
b. Cash.
c. Repairs and maintenance.
d. Property tax expense.

Answer 1

The best account to aid in verifying that all fixed assets have been capitalized would be the Cash account. Cash is the most direct way to verify that a fixed asset has been purchased and capitalized. The other accounts, such as Depreciation Expense, Repairs and Maintenance, and Property Tax Expense, all provide indirect evidence that a fixed asset may have been purchased, but they do not provide as clear of an indication as the Cash account.