Effect of revenue expenditure and correction

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

Asset           Expense          Profit

increase                           decrease                                     increase


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

that means the expense value is now $10000-5000=$5000 decrease and capital expenditure value is $50000+5000=$55000 increase.the profit will be $30000-5000 =$25000 increase.

When it is corrected
Asset                  Expense                    Profit

decrease                          increase                                      decrease

Therefore the asset value is 50000-5000=$45000 decrease.expense value is 5000+5000=$10000 increase. the profit is 30000-10000=$20000 decrease