Question No 01 Chapter No 17 – D.K Goal 11 Class

Question No 01 Chapter No 17

Question No 01 Chapter No 17

Free Accounting book Solution - Class 11 and Class 12

1. State with reasons whether the following are capital or revenue expenditure :

  1. A new machinery is purchased Rs 60,000, Rs 800 were spent on its carriage and Rs 1,500 were paid as wages for its installation
  2. A sum of Rs 10,000 was spent on painting the new factory.
  3. Rs 5,000 paid for the erection of a new machine.
  4. Rs 2,000 were spend on repairs before using a second hand generator purchased recently.
  5. Rs 1,500 were spend on the repair of a machinery
  6. Rs 10,000 was paid as brokerage on issue of shares and other expenses of issue were Rs 25,000

The solution of Question No 01 Chapter No 17: –

(i) It is a capital Expenditure and will be Debited to Machinery Account because the expenses have been incurred before the Machinery is put to use.
(ii) It is a capital Expenditure and will be Debited to Factory Account because the expenses have been incurred before the Factory is put in use.
(iii) It is a capital Expenditure and will be Debited to Machinery Account because the expenses have been incurred before the Factory is put in use.
(iv) It is a capital Expenditure and will be Debited to Generator Account because the expenses have been incurred before the Factory is put in use.
(v) It is a Revenue Expenditure and will be Debited to Repair Account because the expenses have been incurred on the repair of existing Machines. It is an expenditure of routine nature.
(vi) It is a capital Expenditure and will be Debited to Generator Account because brokerages is item of capital expenditure it is incurred on issue of share

The provision in accounting: Types and Treatment

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

D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

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

ISC Accounts 11 20 Image min 197x300 - Question No 01 Chapter No 17 - D.K Goal 11 Class
D K Goel accountancy +1 – ISC_Accounts_11_20_ImageQuestion No 42 Chapter No 11 – D.K Goal 11 Class

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