The erroneous recording of a revenue expenditure as a capital expenditure will cause an overstatement of total revenue for the period.

Question

Quizplus · Accepted Answer

The erroneous recording of a revenue expenditure as a capital expenditure will cause an overstatement of total assets and an understatement of total expenses for the period. This will result in an overstatement of net income and, consequently, an overstatement of total revenue.

The Erroneous Recording of a Revenue Expenditure as a Capital