Question

Installation Charges of a machinery purchased is_______.

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

Answer 1

The correct option is A Capital Expenditure

Capital Expenditures are for fixed assets, which are expected to be productive assets for a long period of time. All the amount paid upto the point an asset is ready for use is included in cost of that asset. Installation charges of a machinery purchased are included in cost of machinery. These expenditure are termed as capital expenditure.