The cost of a plant asset was increased for the payment of this year's insurance premium.This error would cause:

Name: The cost of a plant asset was increased for the payment of this year's insurance premium.This error would cause:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Increasing the cost of a plant asset for the payment of insurance premium would result in an overstatement of the cost of the asset and hence an overstatement of expenses. This would result in lower net income, which would be understated.

The Cost of a Plant Asset Was Increased for the Payment