Amount spent for replacement of worn out part of machine is _______________.
A
Capital Expenditure
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B
Revenue Expenditure
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C
Deferred Revenue Expenditure
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D
Prepaid Expenses
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Solution
The correct option is C Revenue Expenditure A revenue expenditure is an amount that is expensed immediately—thereby being matched with revenues of the current accounting period. Routine repairs are revenue expenditure because they are charged directly to an account such as Repairs and Maintenance.