Question - In 2002, WorldCom was found guilty of fraud as a result of recording revenue expenditures as capital expenditures in their financial statements. The total amount of the error was more than $7 billion over a three-year period (1999 - 2002).
What is a revenue expenditure and how is it different from a capital expenditure?
What was the impact of the error(s) on WorldCom's financial statements and how did this affect the financial position of the company? Be sure to address both the income statement and the balance sheet.
Who was harmed?