If a company capitalizes costs that should be expensed,how is its income statement for current period impacted?
A)Net income will be lower than it should be.
B)Revenues will be lower than they should be.
C)Expenses will be lower than they should be.
D)Assets will be lower than they should be.

Question

Quizplus · Accepted Answer

Capitalizing costs that should be expensed leads to lower reported expenses in the current period because the costs are recorded as assets and expensed over time rather than immediately. This results in higher net income for the period.

If a Company Capitalizes Costs That Should Be Expensed,how Is