If an expenditure related to a depreciable asset is incorrectly treated as a capital expenditure,instead of as a revenue expenditure,which of the following statements is true?
A)The current year's net income will be lower and future depreciation expense will be higher.
B)The current year's net income will be higher and future depreciation expense will be lower.
C)The current year's net income will be higher and future depreciation expense will be higher.
D)The current year's net income will be lower and future depreciation expense will be lower.

Question

Quizplus · Accepted Answer

Capitalizing an expenditure means that the expenditure in this case is added to the depreciable asset account rather than being immediately expensed.

If an Expenditure Related to a Depreciable Asset Is Incorrectly