Classify the following expenditures as capital or revenue expenditure/receipt: (i) ₹ 10,000 spent as import duty on machinery purchased.
CA Foundation · Accounting · RTP · September 2026
Classify the following expenditures as capital or revenue expenditure/receipt: (i) ₹ 10,000 spent as import duty on machinery purchased.
Suggested Answer and Working Notes:
Import duty is paid to bring the machinery to a usable condition and is directly related to acquiring a fixed asset and any cost incurred to acquire, install, or make a fixed asset ready for use forms part of the cost of that asset and is Capital Expenditure .
Topics: Capital and Revenue Expenditures and Receipts
Related Questions in this Topic
- Classify the following expenditures as capital or revenue expenditure/receipt: (iv) Insurance claim received on account...
- Classify the following expenditures as capital or revenue expenditure/receipt: (iii) Cost of testing whether the equipm...
- Classify the following expenditures as capital or revenue expenditure/receipt: (ii) Amount received from debtors during...
- "The cost of Property, Plant and Equipment comprises of any cost directly attributable to bring the asset to the locatio...
- Discuss the basic considerations in distinguishing between capital and revenue expenditure.