Expenses incurred on Trial Run are _________________.

Capital Expenditure

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Revenue Ependiture

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Deferred Revenue Expenditure

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Prepaid Expenses

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Solution

The correct option is A Capital Expenditure
Machinery is capital asset and all cost incur to acquire the asset are classified as capital expenditure.
Preoperative cost also capitalized.
Expenses incurred on trial run are preoperative nature expenses, these cost should be capitalized.

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