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Question
Legal expenses incurred to purchase land are ______.
Options
Capital expenditures
Recurring expenditures
Revenue expenditures
None of these
Solution
Legal expenses incurred to purchase land are Capital expenditures.
Explanation:
- Capital expenditure means the expenditure the benefit of which is not exhausted within the current year but is enjoyed over a long time period.
- Expenses incurred in connection with the purchase of land or building such as fees paid to lawyer or registration fee.
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