Final answer:
The arm of an air conditioning system, when installed, is usually recorded as a fixed asset and is depreciated over its useful life. If it's a replacement or repair that extends life, it's capitalized; otherwise, it's an expense.
Step-by-step explanation:
The question seems to be about where to record the expense of an arm, which is a component installed in an air conditioning (A/C) system, in financial records. When an item such as this is installed in an A/C system, the cost is typically capitalized and recorded on the balance sheet as a fixed asset since it is part of the A/C unit's value. Over time, the arm, along with the entire A/C unit, will be depreciated based on the company's depreciation schedule. This means the expense is spread out over the useful life of the A/C unit in the income statement.
If the arm is considered a replacement or a repair, which extends the life of the existing A/C unit, it will be treated similarly to a new purchase and capitalized. However, if it is a minor repair or a maintenance expense that does not extend the life, it would be recorded as an expense on the income statement in the period in which it occurred. The specific treatment can vary depending on the company's accounting policies and the relevant accounting standards, such as GAAP or IFRS.