Question No 03 Chapter No 17 - D.K Goal 11 Class

Question No 03 Chapter No 17

03. Classify the following into Capital, revenue and Deferred Revenue expenditure, Stating reasons in each case.

A sum of Rs 32,000 has been spent on a machine as follows: Rs 20,000 for addition to Double the output, (ii) Rs 5,000 for repairs necessitated by negligence and (iii) Rs 7,000 for replacement of worn –out parts
Total expenditure on a cinema building during the year was Rs 2,00,000 out of which 20% related to repair and 80% represented improvement and additional
Compensation paid to a retrenched employee for the loss of employment
Second- hand furniture worth Rs 40,000 was purchased and repairing of this furniture cost Rs 15,000. the
furniture was installed by own-wages for this bills Rs 5,000
A person was injured by the motor car of the company Rs 10,000 was paid to him by was of compensation
Advertisement expenditure in expenditure in Special advertisement drive.

The solution of Question No 03 Chapter No 17: –

a	Rs 20,000 Capital Expenditure and Rs 12,000 is revenue Expenditure
b	Rs 40,000 is revenue Expenditure and Rs 1,60,000 is capital Expenditures
c	It is a Revenue Expenditure
d	It is a Capital Expenditure and will be Debited to Furniture Account
f	It is a Deferred Expenditure so that entire burden may not fall on one year.

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Also, Check out the solved question of all Chapters: –

Chapter 1 Evolution of Accounting & Basic Accounting Terms
Chapter 2 Accounting Equations
Chapter 3 Meaning and Objectives of Accounting
Chapter 4 Double Entry System
Chapter 5 Books of Original Entry – Journal
Chapter 6 Accounting for Goods and Service Tax (GST) (Coming soon)
Chapter 7 Books of Original Entry – Cash Book (Coming soon)
Chapter 8 Books of Original Entry – Special Purpose Subsidiary Books (Coming soon)
Chapter 9 Ledger (Coming soon)
Chapter 10 Trial Balance and Errors (Coming soon)
Chapter 11 Bank Reconciliation Statement (Coming soon)
Chapter 12 Depreciation (Coming soon)
Chapter 13 Bills of Exchange (Coming soon)
Chapter 14 Generally Accepted Accounting Principles(GAAP)
Chapter 15 Bases of Accounting
Chapter 16 Accounting Standards and International Financial Reporting Standard(IFRS) (Coming soon)
Chapter 17 Capital and Revenue
Chapter 18 Provisions and Reserves
Chapter 19 Final Accounts (Coming soon)
Chapter 20 Final Accounts – With Adjustments (Coming soon)
Chapter 21 Errors and their Rectification (Coming soon)
Chapter 22 Accounts from Incomplete Records – Single Entry System (Coming soon)
Chapter 23 Accounts of Not-for-Profit Organisations (Coming soon)
Chapter 24 Computerised Accounting System (Coming soon)
Chapter 25 Introduction to Accounting Information System (Coming soon)

Check out the Accountancy Class +1 by D.K. Goal (Arya Publication) from their official Site.