Financial Accounting

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Capital Expenditures vs Expenses: Increase Net Income


Town and Country Corporation is applying for a loan at First National Bank and is worried the loan may not be approved. The company's financial statements are being reviewed by the bank as part of the loan approval process.

The company could incorrectly debit

for the cost of an engine tune-up for a delivery truck so that Total Expenses are

in order to

Net Income which could increase the chance that the loan is approved.