Response to the following questions:
1. Differentiate between the accounting for capital expenditures and revenue expenditures.
2. Immediately after a used truck is acquired, a new motor is installed at a total cost of $4,750. Is this a capital expenditure or a revenue expenditure?
3. a. Does recognizing depreciation in the accounts provide a special cash fund for the replacement of fixed assets? Explain.
b. Describe the nature of depreciation as the term is used in accounting.