A Company's Accountant Capitalizes a Payment That Should Be Recorded

question 38

Multiple Choice

A company's accountant capitalizes a payment that should be recorded as an expense. Which of the following is true?

• A)Revenue is overstated.
• B)Expenses are overstated.
• C)Assets are overstated.
• D)Liabilities are overstated.

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Definitions:

Innkeepers

Individuals or businesses that provide lodging, and sometimes food and drink, to travelers, subject to specific legal duties and responsibilities.

Common Law

A legal system characterized by judicial decisions that are cited as precedent, rooted largely in tradition, and the jurisprudence established by courts.

No-fault Insurance

An auto insurance system where policyholders are compensated for minor injuries regardless of the fault in the accident, limiting the right to sue.

Jurisdictions

The authority of an organization or institution to make and enforce laws or policies in a specific area or over certain types of cases.