Accounting for IGCSE & O level - Accounting Procedures (Section 7 - No. 1)
If a capital expenditure is recorded as a revenue expenditure, how is profit impacted?
Profit is overstated.
Profit is understated.
There is no impact on profit.
Profit will fluctuate year on year.
Explanation
Incorrectly recording a capital expenditure as a revenue expenditure will reduce profits for the year.
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