Which of the following is not an example of capital expenditure?

Cost of issuing shares and debentures

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Wages paid for construction of building

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Repairs on a second hand machinery newly purchased

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Purchase of new spark plug at a cost of Rs.85 for a two-year old delivery van

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Solution

The correct option is D Purchase of new spark plug at a cost of Rs.85 for a two-year old delivery van
A capital expenditure is an amount spent to acquire or significantly improve the capacity or capabilities of a long-term asset such as equipment or buildings.
Purchase of new spark plug is not a revenue expenditure as it is non-recurring expenditure.

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(b) Legal expenses paid for illegal use of trade mark.
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