If a Company Capitalizes Costs That It Should Have Expensed

question 115

Multiple Choice

If a company capitalizes costs that it should have expensed in 2X13 (assume no income tax effect) ,

• A)cash flows will be overstated in 2X13.
• B)cash flows will be understated in 2X13.
• C)net income will be understated in 2X13.
• D)net income will be overstated in 2X13.
• E)no income statement effect will occur.

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