Improperly capitalizing an expense item results in.
A)Understatement of profit in the current year and overstatement in future years.
B)Understatement of profit in the current year and in future years.
C)Overstatement of profit in the current year and understatement in future years.
D)Overstatement of profit in the current year and in future years.

Question

Quizplus · Accepted Answer

Improperly capitalizing an expense item results in overstatement of profit in the current year because the expenses are not fully recognized in the income statement. However, in future years, the expenses will be recognized and result in an understatement of profit.

Improperly Capitalizing an Expense Item Results In