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Question
State, whether you would consider the following as Capital Expenditure or Revenue Expenditure.
Legal fees paid to acquire a building.
Solution
Capital Expenditure
Reason:
Capital Expenditure refers to expenses related to the acquisition of a fixed asset.
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RELATED QUESTIONS
Legal expenses incurred to purchase land are ______.
Capital expenditure is incurred for ______.
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. |
Define Capital expenditure.
______ expenditure is an expenditure benefiting the future period.
State with reason whether the following is Capital or Revenue Expenditure:
Cartage paid to bring a new machine to the factory.
Classify the following into Capital, Revenue and Deferred Revenue Expenditures, reason for your answer.
Premium ₹ 8,000 given for a lease.
State whether the following expense is Capital or Revenue.
Purchase of a computer for the office.
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.
Classify the following:
Cost of increasing the seating capacity in a cinema hall.
