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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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