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Expense Side of Statement of Profit and Loss

Expenses on a...

Question

Expenses on a Foreign Tour to purchase a machinery is _________________.

A

Capital Expenditure

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B

Reserve Expenditue

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C

Deferred Revenue Expenditure

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D

Prepaid Expenses

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Solution

The correct option is A Capital Expenditure
All expenses which incur for acquiring capital asset are classified as capital expenditure.
Expenses on a foreign tour to purchase a machinery classified as capital expenditure as it incurred for acquiring capital asset.

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