Question

Expenses paid for Repairs of Machinery is treated as _______



Capital Expenditure

Revenue Expenditure

Deferred Revenue Expenditure

Deferred Capital Expenditure

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Answer 1

Once the machinery has been put to use, expenses on its running and maintenance are revenue expenditure. Answer: Purchase of machinery, new or secondhand is a capital expenditure. Any amount paid for freight, repair etc

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Answer 2

Expenses paid for Repairs of Machinery is treated as revenue expenditure.

Explanation:

Expenses paid for Repairs of Machinery is treated as revenue expenditure.

• Repair/maintenance charges are the cost of restoring or maintaining an asset to its previous condition or keeping it in its current condition.
• Revenue expenditures are various temporary costs that are incurred in a year.
• They cover the cost of routine repairs and maintenance required to maintain the asset in working order without significantly changing or increasing the asset's useful life.
• Repair of Machinery isn't treated as Capital Expenditure, neither as Deferred Revenue Expenditure nor as Deferred Capital Expenditure.