Expenditures for equipment and renovations (capital expenditures) often provide a benefit over several years. These expenditures would distort the measurement of the recharge operation's annual performance if they were charged to Ledger 2 when paid. Therefore, it is necessary to record them in a separate group of accounts (i.e., the plant fund accounts) that allows the operation to track the expenditures yet reflect them in Ledger 2 based on the periods of their use (i.e., depreciation). There are two types of accounts used for plant fund expenditure accounting; the subsidiary Ledger 8 account and the General Ledger 0-8XXXX account. Both are explained below.

Subsidiary Ledger 8 Account (Plant Fund Expenditure Account)

Plant Fund Ledger 0-8 Account