The effect of capitalising expenditures is to:
A) Decrease current period profit, increase current period assets and decrease future period equity.
B) Increase current period profit, increase current period assets and decrease future period profit.
C) Increase current period profit, decrease current period assets and decrease future period liabilities.
D) Increase current period profit, increase current period equity and increase future period profit.
E) None of the given answers.

Question

Quizplus · Accepted Answer

Capitalizing expenditures increases current period profit by deferring expenses, increases current period assets by adding to the asset base, and decreases future period profit as the capitalized amount is amortized or depreciated over time.

The Effect of Capitalising Expenditures Is To