Question

Repairs incurred before using a second hand car
purchased is
OPTIONS
Revenue expenditure
b.
Capital expenditure
Deferred revenue expenditure
d.
None of the above​

Answer 1

Answer:

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Explanation:

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Answer 2

ANSWER :

Repairs incurred before using a second hand car purchased is

a. Revenue expenditure

b. Capital expenditure ✓

c. Deferred revenue expenditure

d. None of the above

• Repairs incurred before using a second hand car purchased is Capital expenditure.

Any amount spent on acquiring capital asset and the amount spent for immediate repairs for making the capital asset fit for use are treated as Capital expenditures.

MORE INFORMATION :

➣ Capital Expenditure :-

Expenses incurred in acquiring fixed assets or improving fixed assets of a business are termed as Capital Expenditures.

• These expenditures are incurred to purchase fixed assets.

• Capital expenditures are shown at the assets side of the Balance Sheet.

• Such expenditures incresse the earning capacity of the business.

• The benefit of capital expenditures is received over a number of years.

➣ Revenue Expenditures :-

Expenses incurred for meeting the day-to-day expenses of a business are termed as Revenue Expenditures.

• These expenditures are incurref for meeting day to day business operation.

• Capital expenditures are known on the debit side of Trading Account or Profit and Loss Account.

• Such expenditures are incurred for maintaining the present level of the business.

• The benefit of revenue expenditures is received only in the accounting period in which it is incurred.