Accounting for IGCSE & O level - Accounting Procedures (Section 16 - No. 11)
What effect does incorrectly classifying a revenue expenditure as a capital expenditure have on the financial position of a business in the current period?
Assets are understated, and equity is overstated.
Assets are overstated, and equity is overstated.
Assets are understated, and equity is understated.
Assets are overstated, and equity is understated.
Explanation
This causes an overstatement of assets.
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