B为什么错？

问题如下：

Which of the following statements is correct for the current period?

选项：

Inappropriate capitalization is most likely to overstate revenues.

Inappropriate capitalization is most likely to understate liabilities.

Inappropriate capitalization is most likely to understate expenses.

解释：

C is correct.

Capitalization decisions cannot affect revenues and liabilities of a company. However, improperly capitalizing can understate expense. By using aggressive depreciation or amortization method and assumptions, un-recorded allowance for obsolete inventories, and add items in assets instead of recognized as expenses,  companies can understate expenses in current period.