Failure to capitalize a fixed asset at the correct amount would impact which financial statements?
A)the balance sheet only
B)the income statement only
C)the cash flow statement only
D)both the income statement and the balance sheet

Question

Quizplus · Accepted Answer

Failure to capitalize a fixed asset at the correct amount would affect both the income statement (via depreciation expense) and the balance sheet (via the asset's recorded value and accumulated depreciation). It would not directly impact the cash flow statement.

Failure to Capitalize a Fixed Asset at the Correct Amount