A company's accountant capitalized a payment that should have been recorded as a revenue expenditure. How will this error affect the company's financial statements?

A) Expenses will be overstated.

B) Assets will be overstated.

C) Liabilities will be overstated.

D) Net income will be understated.

Which of the following is a characteristic of a current liability?

A) It is an avoidable obligation.

B) It creates a present obligation for future payment of cash or services.

C) It cannot be settled with services.

D) It occurs because of a future transaction or event.