Question No 05 Chapter No 17

Question No 05 Chapter No 17

05. State the reasons whether the following are capital or expenditure:

  1. Rs 20,000 were spent for abstaining a license for starting the factory
  2. A loan of Rs 8 lac@ 15% was taken on 1st October 2019 to construct the factory building. Factory became operational on 1st April 2020 and the loan was repaid on 30th June
  3. Rs 50,000 were spent on advertising a new product, the benefit of the will be effective during four year.
  4. A motor lorry purchased for Rs 5 lac and Rs 2,500 were spent on its insurance. During the year, the wages of its driver amounted to Rs 36,000 and cost of petrol amounted to Rs 25,000
  5. Rs 20,000 invested in Government loan
  6. Raw-material purchased for Rs 2,00,000 and carriage paid on its Rs 2,500
  7. Plant purchased for Rs 1,00,000 and carriage paid on it Rs 1,500

The solution of Question No 05 Chapter No 17: –

iCapital Expenditure
iiInterest upto 1st April 2020 is capital Expenditure and subsequent interest is Revenue Expenditure
iiiIt is a Deferred Expenditure and will be Debited to Issue to shares Account
ivRs 5 lac is capital Expenditure and the balance is Reserve Expenditure
vCapital Expenditure
viReserve Expenditure
viiCapital Expenditure

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 05 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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