If a company incorrectly records a payment as an expense instead of an asset,how will this error affect net income in the current period?
A)Net income will be too low.
B)Net income will be correct.
C)Net income will be too high.

Question

Quizplus · Accepted Answer

Recording a payment as an expense instead of an asset overstates expenses, which reduces net income, making it too low.

If a Company Incorrectly Records a Payment as an Expense