In a business's financial statements, one item of capital expenditure has been classified as revenue expenditure when it should not have been. What effect does this mistake have on the financial statements?
- Aassets overstated, profit for the year overstated
- Bassets overstated, profit for the year understated
- Cassets understated, profit for the year overstated
- Dassets understated, profit for the year understated