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Question

The amount spent on unsuccessful patent rights is ___________.

A
Capital Expenditure
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B
Deferred revenue expenditure (if the amount is large)
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C
Revenue expenditure(even though the amount is large)
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D
None of the Above
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Solution

The correct option is C Revenue expenditure(even though the amount is large)
Amount spent on unsuccessful patent is to be treated as revenue expenditure as the amount spent is a complete loss and no future benefit is expected from this. Hence this should be charged to profit & loss account in one go.

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