A Company's Accountant Expenses a Payment That Should Be Capitalized

question 118

Multiple Choice

A company's accountant expenses a payment that should be capitalized.Which of the following is TRUE?

• A) Net income is understated.
• B) Liabilities are overstated.
• C) Revenue is overstated.
• D) Assets are overstated.

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Definitions:

Supply Chain

The entire network of entities, directly or indirectly, fulfilling customer requests, including manufacturers, suppliers, transporters, warehouses, retailers, and customers themselves.

Variability

The lack of consistency or the tendency to vary, especially in the context of supply chain, leading to challenges in predicting demand, lead times, and inventory levels.

Bullwhip Effect

A phenomenon in supply chains where small fluctuations in demand at the retail level cause progressively larger fluctuations in demand upstream, often leading to inefficiency and increased costs.

Lot Sizes

The quantity of goods processed, produced, purchased, or delivered in a single batch or order, affecting manufacturing efficiency and inventory management.