Accounting for IGCSE & O level - Accounting Procedures (Section 17 - No. 28)
What is the effect on profit if a revenue expenditure is incorrectly treated as a capital expenditure?
Profit is understated.
Profit is overstated.
Profit is unaffected.
The effect depends on the amount.
Explanation
Treating a revenue expenditure as capital means it isn't expensed, resulting in an overstatement of profit.
Comments (0)
