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

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