Question

Amount spent for the construction of temporary huts for storing building material while constructing a building is ________________.

• A. Capital Expenditure
• B. Revenue Expenditure
• C. Deferred Revenue Expenditure
• D. Prepaid Expenses

Answer 1

The correct option is A Capital Expenditure

Capital expenditure or capital expense is the money a company spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land

As cost of construction of temporary huts for storing building material is incurred for construction of building so this expense will be capitalized in the cost of building.