Inauguration expenses of Rs. 10 lakhs incurred on the new unit in an existing business is a capital expenditure. [Dec. 2023, 2 Marks]
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Theoretical FrameworkQuestion 4633 of 110
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Detailed Solution & Explanation
False: Inauguration expenses of rs. 10 lakhs incurred on the new unit in an existing business
is a 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.
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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.
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