If a repair expense is incorrectly capitalized, instead of recorded as repairs a

Question

If a repair expense is incorrectly capitalized, instead of recorded as repairs and maintenance expense, which of the following statements is true?

The current year's net income will be lower and future depreciation expense will be higher

The current year's net income will be higher and future depreciation expense will be lower

The current year's net income will be higher and future depreciation expense will be higher

The current year's net income will be lower and future depreciation expense will be lower

Explanation / Answer

If repairs' expenses is incorrectly capitalized instead of recorded as repairs and maintenance expense give higher net income of current year and higher depreciation expense for future year.

so answer is c) The current year's net income will be higher and future depreciation expense will be higher

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