Question

On purchase of old furniture, the amount of ₹1,000 spent on its repair should be debited to:

Q: Answer-On purchase of old furniture, the amount of ₹1,000 spent on its repair should be debited to:

When an asset like old furniture is purchased and immediately repaired to bring it to usable condition, the repair cost becomes part of the capital cost of the asset. Hence, it should be added to the Furniture account, not expensed as a revenue expenditure.