If the Cost of a Major Service on a Motor

Multiple Choice

If the cost of a major service on a motor vehicle, which did not increased the vehicles' useful life was incorrectly capitalised and added to the carrying amount of the vehicle rather than being expensed, expenses would be:

A) overstated, fixed assets would be overstated and equity would be understated.
B) understated, fixed assets would be understated and equity would be overstated.
C) understated, fixed assets would be overstated and equity would be understated.
D) understated, fixed assets would be overstated and equity would be overstated.