Question

28.Which of the following is a capital expenditure (a) Wages (b) Wages paid for building construction (c) Repair expense of building (d) Advertisement Expense​

Answer 1

Answer:

the correct answer is a)Wages

Answer 2

(b) Wages paid for building construction is a capital expenditure.

Explanation:

• We know, any expenditure incurred for acquiring, upgrading or maintaining an asset is called a Capital expenditure.
• Revenue expenditure are the short term  expenses incurred  to meet the ongoing operational costs. This can be simply wages paid or repairs etc.

• Building is an asset and for acquiring that particular building for once which will provide long term benefits is a capital expenditure.

Therefore, (b) Wages paid for building construction is a Capital expenditure.