Question

5.
An amount spent for replacement of worn out part of machine is
(A) Capital Expenditure
(B) Revenue Expenditure
(C) Deferred revenue
oj Capitol Loss​

Answer 1

Answer:

B is correct option among all

Answer 2

The correct response to the given question is option B: Revenue expenditure.

• Any money or income spent after any of the company's assets to make it run efficiently and keep it in good working order, or for its upkeep, is considered revenue expenditure.
• The term "revenue" refers to money that has been earned and spent.
• This money is put into the service and maintenance accounts.
• This sum is referred to as revenue expenditure since it is used to replace worn-out parts of the machine.
• Money spent on the purchase or development of something that will serve as a fixed asset is referred to as capital expenditure.
• Prepayment revenue is referred to as deferred revenue.
• A capital loss is a financial loss caused by a drop in the value of an important asset, such as an investment.
• As a result, the right answer is revenue expenditure.