Immediately after purchasing a new truck, Rs. 1000 was paid to have the name of the company and other advertisement painted on the truck. This Rs. 1000 is a ________.

capital expenditure

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deferred revenue expenditure

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revenue expenditure

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none of the above

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Solution

The correct option is A capital expenditure
An expenditure incurred for an asset of putting the asset in workable condition i.e. put to use are debited to the asset account.

Hence spending of an amount of Rs.1000 for putting the name of the company and other advertisement painted is a capital expenditure.

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by Laxmi Transport Ltd. Depreciation was provided at

15 %

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