If a revenue expenditure is incorrectly recorded on a company's books as a capital expenditure,which of the following statements will be true?
A) Stockholders' equity will be understated at year end.
B) Net income in the following year will be unaffected.
C) Total assets will be understated at year end.
D) Net income will be overstated for the year.

Question

Quizplus · Accepted Answer

Recording a revenue expenditure as a capital expenditure means that the expense is capitalized and not immediately expensed, leading to an overstatement of net income for the year.

If a Revenue Expenditure Is Incorrectly Recorded on a Company's