If a company that normally expenses advertising costs was to capitalize and amortize these costs over 3 years instead:
A. after the third year net income would always be higher if it is capitalized.
B. after the third year net income would always be lower if it is capitalized.
C. after the third year net income would be higher (if it is capitalized) only if advertising costs were increasing.
D. after the third year net income would be lower (if it is capitalized) only if advertising costs were increasing.
Answer: C
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.