A company incorrectly records revenue expenditures as capital expenditures on its books. As a result, which of the following will be true?

A) Net income will be overstated for the year.
B) Owner's equity will be understated at year-end.
C) Total assets will be understated at year-end.
D) None of the above answers are correct.

Revenue Expenditures

Expenses incurred during the normal operation of a business that are expected to be consumed within the same accounting period.

Capital Expenditures

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Net Income

The total profit or loss of a company after all revenues, expenses, and taxes have been accounted for.