Advertisements
Advertisements
प्रश्न
Expenses incurred to repair a second-hand machine, purchase by the firm, to make it usable are treated under which expenditure?
विकल्प
Revenue
Capital
Deferred revenue
Capital loss
उत्तर
Capital
Explanation:
Expenditure incurred for the extension of or improvement in fixed assets is also capital expenditure. Such expenditure e.g. over hauling of second hand machinery, etc. helps to increase the profit earning, capacity of business by increasing output or reducing costs.
APPEARS IN
संबंधित प्रश्न
Expenditures incurred to acquire fixed assets are called ______.
Match the Column I and Column II:
| Column - I | Column - II | ||
| (a) | Preliminary expenses of ₹ 5,000. | i | Capital Expenditure |
| (b) | Purchase of old machine for ₹ 9,500. | ii | Revenue Expenditure |
| (c) | Wage paid ₹ 1,500 for carriage for goods. | iii | Deferred Revenue Expenditure |
| (d) | Loan received from Banks ₹ 10,00,000. | iv | Capital Receipts |
Explain the rules for deciding whether an expenditure is of capital nature.
An expenditure is a capital expenditure because ______.
State with reason whether the following is Capital or Revenue Expenditure:
Brokerage paid for purchase of land.
State whether the following is Capital, Revenue or Deferred Revenue Expenditure.
Cartage paid on purchase of furniture.
State whether the following expense is Capital or Revenue.
Cost of raising a loan.
State, whether you would consider the following as Capital Expenditure or Revenue Expenditure.
Cost of director's trip abroad for purchase of a new plant.
In the following case indicate the amount to be debited as Capital Expenditure and Revenue Expenditure:
A sum of ₹ 40,000 was spent on a machine consisting of ₹ 30,000 for increasing its production capacity, ₹ 1,000 for repairs and ₹ 9000 for replacement of worn-out parts.
In the following case indicate the amount to be debited as Capital Expenditure and Revenue Expenditure:
A new machine is purchased for ₹ 25,000, ₹ 500 are spent on its carriage and ₹ 1,500 were paid as wages for its installation.
