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Question
Classify the following into Capital, Revenue and Deferred Revenue Expenditures, reason for your answer.
₹ 15,000 paid for obtaining a mortgage.
Solution
Capital Expenditure
Reason:
It's incurred in order to construct a fixed asset.
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RELATED QUESTIONS
Legal expenses incurred to purchase land are ______.
Expenses incurred to repair a second-hand machine, purchase by the firm, to make it usable are treated under which expenditure?
Match the Column I and Column II:
| Column - I | Column - II | ||
| (a) | Capital Expenditure | i | Repairs costing ₹ 600 carried out on a boiler. |
| (b) | Revenue Expenditure | ii | Advertising expenses ₹ 25,000 incurred for launching a new product in the market. |
| (c) | Deferred Revenue Expenditure | iii | Interest received. |
| (d) | Revenue Receipts | iv | A sum of ₹ 15,000 spent on the overhauling of a second-hand delivery van. |
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In the following case indicate the amount to be debited as Capital Expenditure and Revenue Expenditure:
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