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

question 72

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:

Qualified Endorsement

A type of endorsement on a negotiable instrument, which limits the liability of the endorser.

Without Recourse

A term indicating that the seller of a financial instrument assumes no liability if the instrument fails to perform.

Qualified Endorsement

An endorsement on a negotiable instrument that includes conditions limiting the liability of the endorser.

Special

Distinguished by a unique or particular quality, different from the norm.