1. When a company records a capital expenditure as a revenue expenditure (i.e. expenses it), what affect does this error have on the companys financial statements in that year?
   1. Total Assets are overstated and Net Income is overstated.
   2. Total Assets are understated and Net Income is overstated.
   3. Total Assets are understated and Net Income is understated.
   4. Total Assets are overstated and Net Income is properly stated.