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

Question

Quizplus · Accepted Answer

The incorrect capitalization or improper valuation of an asset affects the income statement for the depreciable life of the asset due to the impact on depreciation expense.

The Failure to Capitalise a Permanent Asset, or the Recording