Accounting for IGCSE & O level - Accounting Procedures (Section 23 - No. 29)
A company spends $10,000 on repairs and maintenance of existing machinery. This expenditure is most likely a:
Capital expenditure
Revenue expenditure
Both capital and revenue expenditure
Neither capital nor revenue expenditure
Explanation
Repairs and maintenance are usually considered revenue expenditures, as they benefit the business in the short term. Capital expenditure usually involves improvements that enhance the useful life of an asset.
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