A company's accountant capitalises a payment that should be recorded as an expense.Which of the following is TRUE?

Name: A company's accountant capitalises a payment that should be recorded as an expense.Which of the following is TRUE?
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Question

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When a payment is capitalized instead of being recorded as an expense, it leads to an overstatement of assets on the balance sheet because the expense is now being recognized as an asset. This error does not affect liabilities, revenue, or expenses directly.

A Company's Accountant Capitalises a Payment That Should Be Recorded