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18. Repairs of an engine were charged at a cost of Rs. 5,000 to maintain its fuel efficiency is: (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the above?
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18. Repairs of an engine were charged at a cost of Rs. 5,000 to mainta...
**Answer:**

The repairs of an engine, which were charged at a cost of Rs. 5,000 to maintain its fuel efficiency, can be classified as **(b) Revenue expenditure**.

Here's the explanation:

**Capital Expenditure:**
Capital expenditure refers to the expenses incurred for acquiring or improving a long-term asset that provides benefits over multiple accounting periods. These expenses are usually significant and are expected to generate future economic benefits.

**Revenue Expenditure:**
Revenue expenditure refers to the expenses incurred in the day-to-day operations of a business to maintain its revenue-generating capacity. These expenses are generally regular and recurring in nature and are necessary to maintain the existing level of operations.

**Deferred Revenue Expenditure:**
Deferred revenue expenditure refers to the expenses that provide benefits over multiple accounting periods but are initially charged to the revenue account. These expenses are then spread over a certain period of time by debiting them to the profit and loss account in subsequent accounting periods.

**Analysis of the Given Scenario:**
In the given scenario, the repairs of an engine were charged at a cost of Rs. 5,000 to maintain its fuel efficiency. Based on this information, we can conclude that the expenditure is revenue in nature. Here's the reasoning:

1. The repairs of the engine are necessary to maintain its fuel efficiency, which directly affects the day-to-day operations of the business.
2. The expenditure of Rs. 5,000 is a regular and recurring expense, as the engine may require repairs periodically to ensure its proper functioning.
3. The repairs do not result in the acquisition or improvement of a long-term asset that provides benefits over multiple accounting periods.
4. There is no indication that the expenditure is being deferred and will be spread over multiple accounting periods.

Based on these factors, the repairs of the engine, charged at a cost of Rs. 5,000, can be considered as revenue expenditure.
Community Answer
18. Repairs of an engine were charged at a cost of Rs. 5,000 to mainta...
Revenue Expenditure.
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18. Repairs of an engine were charged at a cost of Rs. 5,000 to maintain its fuel efficiency is: (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the above?
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18. Repairs of an engine were charged at a cost of Rs. 5,000 to maintain its fuel efficiency is: (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the above? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about 18. Repairs of an engine were charged at a cost of Rs. 5,000 to maintain its fuel efficiency is: (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the above? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 18. Repairs of an engine were charged at a cost of Rs. 5,000 to maintain its fuel efficiency is: (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the above?.
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