If an item of expenditure is mistakenly classified as capital rather than revenue expenditure, explain the effect

Question:

If an item of expenditure is mistakenly classified as capital rather than revenue expenditure, explain the effect of this error on the reported net profit of the business.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For answer-question

Frank Woods Business Accounting Basics

ISBN: 9780273725008

1st Edition

Authors: Frank Wood, Mr David Horner

See More Books

Question Posted: Mar 08, 2024 07:00 AM

See More Questions

List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...
Explain the meaning of the terms emoluments, employments and office for the purposes of PAYE as you earn systems. 2. Explain the actual receipts basis of assessing the emoluments from the employment...
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
Explain what quality management knowledge and skills an auditor should possess when auditing
What is the multiplier formula for an autonomous increase in investment in Nation 1? In Nation 2? How are foreign repercussions related to international business cycles?
What techniques can be used to analyze real options?
Epic Systems is a Wisconsin health care software company. In 2014, Epic introduced a company policy that required employees to use individual arbitration in any disputes. Jacob Lewis, an Epic...
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the companys costing system and do what you...
Tl-208 decays through a beta emission and has a half-life of 3.05 minutes. Besides the beta emission, there are several gamma rays associated with the decay and these gamma emissions occur at...
Petra Gadd has produced an income statement for her first year of business. However, she has made errors in classifying some of her expenditure. The gross profit includes income from the sale of a...
A local community sports club is run as a not-for-profit organisation. Classify the following amounts as either capital expenditure, revenue expenditure, capital income or revenue income, and provide...
What types of period-end adjustments are made to payroll and related amounts?
Find the gross income, the adjusted gross income, and question content area top Part 1 Use the 2021 marginal tax rates in the table to compute the tax owed by the person with the given filing status...
Comment on the calculations on Bunge's liquidity and solvency ratios from 2017-2022. Liquidity Ratios Current Ratio Quick Ratio Cash Ratio Solvency Ratios Debt Ratios: Debt to Total Assets Debt to...
Fungal Boiling Tea Inc. has fixed assets of $27,730. The company has long-term debt of $34,780 and note-payables (short-term) of $16,920, as well as stockholder equity of $5,875. What is the amount...
Organizations and Organizational Effectiveness What is an organization? Why do organizations exist? What are the differences between organizational structure, culture, design, and change? How do...
What are three key factors in making your budget effective? Question 7 options: Tracking your spending Basing your budget on daily expenses. Writing the budget down Budgeting for common "emergencies"...
The 4-kg uniform slender bar BD is attached to bar AB and a wheel of negligible mass which rolls on a circular surface. Knowing that at the instant shown bar AB has an angular velocity of 6 rad/s and...
A handrail, which weighs 120 N and is 1.8 m long. was mounted to a wall adjacent to a small set of steps (Figure P4.26). The support at A has broken, and the rail has fallen about the loose bolt at 8...
A business has an item in inventory that originally cost $ 140$ and usually sells for $ 200$. But it is damaged, and before it can be sold for $ 200$ it must be repaired at a cost of $ 50$....
If the two totals of a trial balance do not agree, the difference must be entered in (A) The Income Statement (B) A Suspense Account (C) A Nominal Account (D) The Capital Account
If trade payables at 1 January 2019 were 2,500, trade payables at 31 December 2019 4,200 and payments to creditors 32,000, then purchases for 2019 are (A) 30,300 (B) 33,700 (C) 31,600 (D) 38,700
5 Terms of a lease agreement and related facts were as follows: a. The lease asset had a retail cash selling price of $136,000. Its useful life was six years with no residual value (straight-line...
The Chani Company had the following sales forecast: January 440 February 500 March 380 April 300 The company buys products for $320 each and then resells them for $430 each and pays for operating...
Pureform, Incorporated, uses the weighted-average method in its process costing system. It manufactures a product that passes through two departments. Data for a recent month for the first department...

If an item of expenditure is mistakenly classified as capital rather than revenue expenditure, explain the effect

Question:

Step by Step Answer:

Net profit would b...View the full answer

Frank Woods Business Accounting Basics

Students also viewed these Business questions