Question

Expenses on installation of a new machinery is ? Capital expense
Capital loss
Revenue loss
Revenue expense

Answer 1

Answer:

Capital expenditure...

Answer 2

Answer:

Expenses on the installation of new machinery are Capital expenses/expenditures.

Explanation:

Capital expenses/expenditures:

• The money that an organization or corporate body spends to purchase, maintain, or upgrade its fixed assets, such as buildings, cars, equipment, or land, is known as a capital expenditure or capital expense.
• When an item is freshly acquired or when funds are used to increase the useful life of an existing asset, like fixing the roof, it is seen as a capital expenditure.
• Until an item is ready to be put to use, any incidental costs incurred in connection with that asset are recognized as part of the asset cost and should be deducted from the relevant asset account.

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