Question

State whether the following expenses are capital or revenue in nature:
(i) Expenses on whitewashing and painting of a building purchased to make it ready for use.
(ii) Rs. 10,000 spent on construction platform for a new machine.
(iii) Repair expenses of Rs. 25,000 incurred for whitewashing of factory building.
(iv) Purchased a new car.

Answer 1

| Expenditure | Reason |
| (i) Capital Expenditure | Paid to make an asset ready to use |
| (ii) Capital Expenditure | Paid to make an asset ready to use |
| (iii) Revenue Expenditure | Made for the maintenance of asset |
| (iv) Revenue Expenditure | Part of normal operating cost |
| (v) Capital Expenditure | Used in business for a number of years |