Many companies have gotten into trouble by recording costs as expenses,rather than capitalizing them.

Question

Quizplus · Accepted Answer

Capitalizing costs when they should be expensed can lead to trouble for companies, as it overstates assets and understates expenses in the short term, potentially misleading investors and regulators. Recording costs as expenses when they occur is generally the conservative and often the correct accounting approach.

Many Companies Have Gotten into Trouble by Recording Costs as Expenses,rather