Accountancy, asked by mrkamanahalli09, 1 month ago

legal charges incurred in connection with the purchase of land capital or revenue​

Answers

Answered by arshifa88
1

Explanation:

Capital expenditure :- 

Money spent by a business or organization on acquiring or maintaining fixed 

assets, such as land, buildings, and equipment.

all expenses should be capitalised, which incurred until the process of acquisition of fixed asset not completed.

So here checking the papers of property is a type of expense which incurred during the process of acquisition of land.Therefore this expense fall under capital expenditure.   

Generally, legal fees may be currently deductible as ordinary and 

necessary business expenses.

This expenditure incurred after the acquisition of land. So this expense can not be capitalised.

So suit filed against the purchaser is revenue expenditure.

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