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Multiple Choice Questions

Capital expenditure and revenue expenditure

A level and AS level


Which cost should be treated as revenue expenditure?

A installing a new sound system in a car
B purchase of a trailer for a car
C replacing a damaged engine of a car
D replacing an old car with a new one

Answer: C

Replacing damaged engine is to keep car in already existing working condition not to improve efficiency.


Which item is classed as revenue expenditure?

A installation costs of machinery
B legal fees on the purchase of premises
C number plates on a new motor vehicle
D redecorating office premises


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