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WAEC Financial Accounting 2011 Question 2

Question 2

Capital and Revenue Expenditure

Which of the following is a capital expenditure?

  1. A.Extension of building
  2. B.Repairs of generator
  3. C.Purchase of stock
  4. D.Purchase of stationery
Show the answer and explanation

Answer: A (Extension of building)

Explanation

Extending a building increases a fixed asset for many years; the others are day-to-day revenue expenses.