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      Question

      Which of the following is a "Capital

      Expenditure"?
      A Repair of a second-hand machine before its first use. Correct Answer Incorrect Answer
      B Annual insurance premium for the factory. Correct Answer Incorrect Answer
      C Payment of monthly electricity bills. Correct Answer Incorrect Answer
      D Purchase of raw materials. Correct Answer Incorrect Answer
      E Cleaning expenses of the office. Correct Answer Incorrect Answer

      Solution

      Costs incurred to bring a second-hand asset into working condition for its intended use are capitalized as part of the asset's cost.

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