Miss Hap, the company bookkeeper, recorded the annual repair costs on the company's machinery as an increase to the Machinery account. As a result, which of the following statements correctly describes this situation?
A. Expenses will be overstated.
B. Liabilities will be overstated.
C. Stockholders' equity will be understated
D. Assets will be overstated.

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drmallery drmallery · Answer 1 · 2021-07-29T19:56:49+02:00

Answer:

D

Explanation:

Repairs shouldn’t be recorded to the equipment (asset) account but should be recorded as an expense instead.

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