Recording of an acquisition of a fixed asset at an improper amount affects the balance sheet until the company disposes of the asset, but the income statement is not affected.

Question

Quizplus · Accepted Answer

Recording an acquisition of a fixed asset at an improper amount affects not only the balance sheet through incorrect asset and possibly equity values but also the income statement over time due to incorrect depreciation expense, which impacts net income.

Recording of an Acquisition of a Fixed Asset at an Improper