A firm capitalizes an item that should have been expensed. What effect will this have on the Income Statement?

Select one:

a. None, it was capitalized so the effect is in the Balance Sheet.

b. Cash flow will be higher in the current period.

c. Profits will be higher in the following perioD.

d. Profits will be lower in the current period.

e. Expenses will be lower in the current period.