If an Expenditure Related to a Depreciable Asset Is Incorrectly

question 101

Multiple Choice

If an expenditure related to a depreciable asset is incorrectly treated as a capital expenditure,instead of as repairs and maintenance expense,which of the following statements is true?

• A)The current year's net income will be lower and future depreciation expense will be higher.
• B)The current year's net income will be higher and future depreciation expense will be lower.
• C)The current year's net income will be higher and future depreciation expense will be higher.
• D)The current year's net income will be lower and future depreciation expense will be lower.

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Definitions:

Positive Behaviour

Actions or reactions that are constructive, beneficial, and promote well-being in an individual or group.

Budgetary Process

A systematic approach used by organizations to plan and allocate resources based on projected revenues and expenses.

Budget Goals

Financial targets that an organization aims to achieve within a specific period through its budgeting process.

Forecast Level

The estimation of future quantities, values, or trends based on current and historical data.