UPSC PRELIMS · ECONOMICS · CAPITAL AND REVENUE EXPENDITURE
With reference to the expenditure made by an organisation or a company, which of the following statements is/are correct? 1. Acquiring new technology is capital expenditure. 2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure. Select the correct answer using the code given below:
Take a breath. Choose one. Press A–D on your keyboard if you like.
EXPLANATION
Acquisition of new technology creates a capital asset. Debt and equity financing are financing methods, not classified simply as capital versus revenue expenditure.
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