Question 1.
State whether the following expenses are capital or revenue in nature:
(i) Expenses on whitewashing and painting of a building purchased to make it ready for use.
(ii) ₹ 10,000 spent on construction platform for a new machine.
(iii) Repair expenses of ₹ 25,000 incurred for whitewashing of factory building.
(iv) Purchased a new car.
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1. It is a Capital expenditure
2. It is a Capital expenditure
3. It is a Revenue expenditure
4. It is a Revenue expenditure
Explanation:
- Capital expenditures are those expenditures which are for the fixed assets like machinery and plant, that are expected to be productive assets for the long time.
- Revenue expenditures are those expenditures which are occurred for costs in relation to the particular transactions of the operating years.
1. It is a capital expenditure as it is occurred for making the asset ready to use.
2. It is a capital expenditure as it is occurred for making the asset ready to use.
3. It is a revenue expenditure as it is occurred for the maintenance of the asset.
4. It is a revenue expenditure as it is a part of the operating costs, which is occurred in business.
You can learn more from here about capital expenditure:
brainly.in/question/13516337
You can learn more from here about revenue expenditure:
brainly.in/question/2574281
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