The failure to capitalise a permanent asset, or the recording of an asset acquisition at the improper amount, affects the balance sheet:
A) forever.
B) for the current period.
C) until the firm disposes of the asset.
D) for the depreciable life of the asset.

Question

Quizplus · Accepted Answer

The failure to capitalize a permanent asset or recording it at an improper amount affects the balance sheet until the firm disposes of the asset. This is because the incorrect asset value will continue to impact the balance sheet's accuracy until the asset is no longer part of the company's accounts.

The Failure to Capitalise a Permanent Asset, or the Recording