Question

State with reasons which item is capital and which item is revenue in nature.
(i) 32.000 were spent in the construction of a office building,
(ii) 11,000 were spent on the replacement of a part of machine which will increase the
earning capacity.
(iii) Paid 60,000 salaries to the staff.
(iv) Discount allowed to debtors 150.
(v) Legal expenses ? 4,000 paid to acquire the ownership of a building.

Answer 1

Answer:

1. capital

2. capital

3 revenue

4revenue

5 capital