Capitalizing an expenditure rather than recording it as a revenue expenditure
A)affects the amount of net income reported during an accounting period,but has no effect on the total book value of plant assets on the balance sheet.
B)affects the total book value of plant assets on the balance sheet,but has no effect on the amount of net income reported during an accounting period.
C)affects the total book value of plant assets reported on the balance sheet and the amount of net income reported during a period.
D)has no effect on the book value of plant assets on the balance sheet or the amount of income reported on the income statement.

Question

Quizplus · Accepted Answer

Capitalizing an expenditure increases the asset's value on the balance sheet and spreads the expense over the asset's useful life, affecting both the book value of plant assets and net income due to depreciation.

Capitalizing an Expenditure Rather Than Recording It as a Revenue