Failure to Capitalize a Fixed Asset at the Correct Amount

question 60

Multiple Choice

Failure to capitalize a fixed asset at the correct amount would impact which financial statements?

• A)the balance sheet only
• B)the income statement only
• C)the cash flow statement only
• D)both the income statement and the balance sheet

---

Definitions:

Adjusting Entries

Journal entries made in accounting records at the end of an accounting period to allocate income and expenditure to the correct periods.

NSF Check

A check that cannot be processed because the account on which it is drawn does not have sufficient funds.

Monthly Service Charge

A fee charged by a provider to a consumer for the provision of services on a monthly basis.

Cash Disbursements

Payments made in cash as part of a business's operational activities.