Throughout the current year, Calverton Company treated sales taxes paid on purchases of plant assets as revenue expenditures. As a result, the current year's:
A) Net income is overstated.
B) Revenue is overstated.
C) Depreciation expense is understated.
D) None of the above; payments of sales taxes should be treated as revenue expenditures.

Question

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The Answer of Throughout the current year, Calverton Company treated sales taxes paid on purchases of plant assets as revenue expenditures. As a result, the current year's:
A) Net income is overstated.
B) Revenue is overstated.
C) Depreciation expense is understated.
D) None of the above; payments of sales taxes should be treated as revenue expenditures.

Throughout the Current Year, Calverton Company Treated Sales Taxes Paid