Question No 02 Chapter No 17
02. State whether the following expenditure are capital, Revenue or Deferred Revenue. Give Reason:
- Furniture of book value of Rs 10,000 were sold off at Rs 2,500 and the furniture of the value of Rs 6,000 were acquired, Cartage on purchase Rs 50.
- Temporary huts were constructed costing Rs 25,000. these were necessary for the construction of the new building and were demolished when the building was ready
- Replacement of old machinery by a new one.
- Rs 40,000 were Spent in dismantling and removing the machinery from old site to a more suitable site.
- Removal of stock from old site cost Rs 20,000. the new site is more favorable located.
The solution of Question No 02 Chapter No 17: –
|(i)||Rs loss of Sale Of Rs 7,500 will Revenue Expenditure and Rs 6,050 is capital Expenditure.|
|(ii)||It is a capital Expenditure and will be Debited to Building Account because the expenses have been incurred before the Building 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 Revenue Expenditure and will be Debited to Damages Account|
|(v)||It is a Deferred Expenditure so that entire burden may not fall on one year.|
Also, Check out the solved question of all Chapters: –
D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution
- 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)
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