If a Revenue Expenditure Is Incorrectly Recorded on a Company's

question 145

Multiple Choice

If a revenue expenditure is incorrectly recorded on a company's books as a capital expenditure,which of the following statements will be true?

• A)Stockholders' equity will be overstated at year end.
• B)Net income in the following year will be unaffected.
• C)Total assets will be understated at year end.
• D)Net income will be understated for the year.

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Definitions:

Extinction

In psychology, the gradual weakening and eventual disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.

Eye-Movement Desensitization

a component of EMDR therapy focusing on alleviating the distress associated with traumatic memories through guided rapid, rhythmic eye movements.

Post-Traumatic Stress Disorder

A psychological disorder caused by exposure to or direct experience of a horrifying incident, marked by recurrent flashbacks, distressing dreams, and intense fear.

Reprocessing

The act of revisiting and analyzing previous experiences with the aim of altering one's response or perspective towards them.