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WAEC Financial Accounting 1997 Question 5

Question 5

Public Sector Accounting

Which of the following is not a capital expenditure to a local government?

  1. A.Beds
  2. B.Theatre equipment
  3. C.Incubators
  4. D.X-ray machine
  5. E.Drugs.
Show the answer and explanation

Answer: E (Drugs.)

Explanation

Drugs are used up quickly, so buying them is recurrent (revenue) spending; the others are long-lasting assets.