Replacement shelving (£500) was recorded as fixtures and fittings. As a result:

Name: Replacement shelving (£500) was recorded as fixtures and fittings. As a result:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Recording replacement shelving as fixtures and fittings (a non-current asset) instead of an expense leads to profit being overstated because the expense is not recognized in the income statement. Additionally, non-current assets are overstated because the cost is incorrectly capitalized rather than expensed.

Replacement Shelving (£500) Was Recorded as Fixtures and Fittings