Question 2.
State with reasons whether the following are Capital or Revenue Expenses:
(i) Excise duty paid on purchase of new machine.
(ii) Wages paid to install a machine.
(iii) Repairs carried out on existing car.
(iv) Office block of building repainted for ₹ 50,000.
(v) Paid telephone bill ₹ 2,500.
Answers
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Answer:
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Answered by
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1. Capital expenditure
2. Capital expenditure
3. Revenue expenditure
4. Revenue expenditure
5. 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 acquisition of the new asset.
2. It is a capital expenditure as it is occurred for make the asset ready to use.
3. It is a revenue expenditure as it is occurred for the maintenance well as running of car.
4. It is a revenue expenditure as it is occurred for the maintenance of the building.
5. 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:
https://brainly.in/question/13516337
You can learn more from here about revenue expenditure:
https://brainly.in/question/2574281
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