Question

Wages paid Rs. 5,000 on purchase of furniture is
O Revenue Expenditure
O Deferred Revenue Expenditure
O Capital Expenditure
O Added to Wages A/c​

Answer 1

Answer:

Added to Wages A/c

Explanation:

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Answer 2

Wages paid Rs. 5,000 on purchase of furniture is c) Capital Expenditure.

Definition of Capital Expenditure:-

Capital expenditures are those expenditures that become the operational machinery of the business and help to carry out day-to-day operations of the business.

Characteristics of Capital Expenditure:

• These expenditures are usually one-time expenditures and not revenue in nature.

• These expenditures are occurs to acquire the fixed assets and machinery.

• These expenditures are huge so can't be allocated in one year so these expenses are amortized between the 5 years.

• The other expenses such as payment of wages to an employee, payment of freight, etc., are also added to the cost of capital expenses.

Thus, the wages paid on the purchase of furniture will be treated as capital expenditure.