A company's accountant capitalizes a payment that should be recorded as an expense. Which of the following is true?

Question

Quizplus · Accepted Answer

Capitalizing a payment that should be recorded as an expense results in an increase in assets on the balance sheet, because the payment is treated as an investment or asset rather than an expense. This does not directly affect revenue, expenses, or liabilities in the way the other options suggest.

A Company's Accountant Capitalizes a Payment That Should Be Recorded