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JAMB Principles of Accounts 2014 Question 43

Question 43

Capital and Revenue Expenditure

The expenses incurred in purchasing a vehicle is a

  1. A.revenue expenditure.
  2. B.capital expenditure.
  3. C.recurrent expenditure.
  4. D.concurrent expenditure.
Show the answer and explanation

Answer: B (capital expenditure.)

Explanation

Buying a vehicle (and the costs of getting it) adds a fixed asset, so it is capital expenditure.