Jamison Inc.is a regional air cargo carrier.Jamison made a $4500 improvement to one of its airplanes.If Jamison's accountant expensed this amount which of the following statements is true?

Question

Quizplus · Accepted Answer

Expensing the $4500 improvement would improperly understate the company's net income for the year because the improvement should be capitalized as a long-term asset and depreciated over its useful life. This would spread the cost of the improvement over multiple years rather than expensing it all in the current year, which would provide a more accurate representation of the company's financial position.