Effect of capital expenditure and correction

When capital expenditure treated/recorded as revenue expenditure the following error/effect  will incur

Asset           Expense          Profit

decrease                           increase                                     decrease


Illustration:
suppose that abc company has capital expenditure $50000. its expense $10000 and profit has $30000.by accounting clearking error $5000 of ($50000) capital expenditure is recorded as an expense.

that means the expense value is now 10000+5000=$15000 increase and capital expenditure value is 50000-5000=$45000 decrease.the profit will be $30000-$15000 =$15000 decrease.

When it is corrected
Asset                  Expense                    Profit

increase                          decrease                                       increase

Therefore the asset value is 5000+45000=450000 increase.expense value is 15000-5000=$10000 decrease. the profit is 30000-10000=$20000 increase