Capitalizing or expensing costs has an effect on the financial statement. They also affect the organization's bottom line. Costs incurred to purchase a plant asset increase the useful life or enhance the quality of a fixed asset. They are generally capitalized. In other words, the basis of the fixed asset is increased. * How do capital expenditures such as plant asset differ from ordinary costs that are expensed on the income statement. * What is the impact on the financial statement if a capital expenditure is immediately expensed in error? * Provide an example of a plant asset that you may have seen at your job or business you have visited