Any amount spent for replacement of worn out part of a machine is capital expenditure, [June 2022, 2 Marks]; [MTP Jan. 2025]
For any discrepancies in this question, email contact@cadada.in
Theoretical FrameworkQuestion 4632 of 110
All Questions Ad
Detailed Solution & Explanation
False: Any amount spent for replacement of worn part of a machine is treated as revenue
expenditure.
About This Chapter: Theoretical Framework
Paper
Paper 1: Accounting
Weightage
5-10%
Key Topics
Policies, Standards (Ind AS), Vocabulary
This chapter covers Policies, Standards (Ind AS), Vocabulary and is part of Paper 1: Accounting in the CA Foundation exam.
View Official ICAI SyllabusExam Strategy Tip
This topic carries 5-10% weightage. Focus on understanding core concepts rather than memorizing.
Key Concepts to Understand
Capital Expenditure
Expenditure incurred to acquire, improve, or extend the life of a fixed asset that provides benefit over more than one accounting period. It is shown as an asset in the Balance Sheet.
Revenue Expenditure
Expenditure incurred in the normal course of business operations whose benefit is consumed within the same accounting period. It is charged to the Profit & Loss Account.
More Questions from Theoretical Framework
What do you mean by accounting? Give its definition.
What are the branches of Accounting? Explain. OR What are the sub-fields of Accounting? [Dec 2023]
Limitations of accounting
Functions of accounting data. [Jan. 2025, 4 Marks]
Differentiate between Book keeping and Accounting. [Sept. 2024, 4 Marks]
Capital is all assets less fictitious assets.
Ready to Master Theoretical Framework?
Practice all 110 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.
Start Practicing — It's Free