Accounting for IGCSE & O level - Accounting Procedures (Section 11 - No. 15)
How does incorrectly classifying a capital expenditure as a revenue expenditure affect profit in the current period?
Profit is overstated.
Profit is unaffected.
Profit is understated.
Profit is more volatile.
Explanation
If it is classified as revenue, it will decrease the profit for that year
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