Sassycat Designs inadvertently recorded an expense as a capital expenditure. Which of the following will occur as a result of this mistake?

Question

Quizplus · Accepted Answer

Recording an expense as a capital expenditure means it is added to the asset's value rather than being expensed immediately. This results in higher assets and higher net income in the short term, as expenses are understated.

Sassycat Designs Inadvertently Recorded an Expense as a Capital Expenditure