If a company expenses costs that should be capitalized,how is its income statement for the current period impacted?
A)Net income is overstated.
B)Revenues are understated.
C)Expenses are overstated.
D)Assets are overstated.

Question

Quizplus · Accepted Answer

To capitalize a cost means to record it as an asset instead of expensing it.If costs are expensed that should have been capitalized,then expenses are overstated and net income is understated.Assets would be understated.

If a Company Expenses Costs That Should Be Capitalized,how Is