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

Question

Quizplus · Accepted Answer

Capitalizing costs that should be expensed will result in expenses being understated on the income statement for the current period. This leads to an overstatement of net income.

If a Company Capitalizes Costs That Should Be Expensed,how Is