Advertisements
Advertisements
Question
Expenses incurred to repair a second-hand machine, purchase by the firm, to make it usable are treated under which expenditure?
Options
Revenue
Capital
Deferred revenue
Capital loss
Solution
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
RELATED QUESTIONS
Capital expenditure is incurred for ______.
An expenditure is a capital expenditure when ______.
Purchased a computer for office is which type of expenditure?
______ is an example of Capital Expenditure.
Classify the following into Capital, Revenue and Deferred Revenue Expenditures, reason for your answer.
₹ 15,000 paid for obtaining a mortgage.
Classify the following into Capital, Revenue and Deferred Revenue Expenditures, reason for your answer.
Wage paid for extension of office premises.
In the following case indicate the amount to be debited as Capital Expenditure and Revenue Expenditure:
A total expenditure of ₹ 50,000 was incurred on factory buildings out of this 20% related to repairs and 80% related to extensions.
Classify the following:
Cost of converting a petrol engine into a diesel engine.
Classify the following:
Cost of increasing the seating capacity in a cinema hall.
Which of the following are Capital Expenditure, Revenue Expenditure and Deferred Revenue Expenditure?
Cost of painting the name of the company and other advertisement message on a newly purchased delivery van.
