The Effect of Recording a Capital Expenditure as a Revenue

question 47

Multiple Choice

The effect of recording a capital expenditure as a revenue expenditure is that:

• A) expenses are overstated, and owners' equity is understated.
• B) net profit is understated, and owners' equity is overstated.
• C) expenses are understated, and accumulated depreciation is overstated..
• D) assets are overstated, and expenses are understated.

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Definitions:

Procedural Memories

A type of long-term memory involved in learning and performing tasks and skills, such as riding a bike or typing, which operates often without conscious awareness.

Amygdala

A structure within the brain's temporal lobe that is involved in emotional responses, decision-making, and memory processing, particularly known for its role in fear and pleasure responses.

Serial Position

A cognitive phenomenon where an individual is more likely to recall the first and last items in a series of objects or words, known as the primacy and recency effect, respectively.

Primacy Effect

The tendency to remember information that is presented first more effectively than information that is presented later.