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WAEC Financial Accounting 2009 Question 18

Question 18

Capital and Revenue Expenditure

Cost of extension to a factory building is classified as

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

Answer: C (capital expenditure)

Explanation

Extending a building adds to a fixed asset that lasts many years, so it is capital expenditure.