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Classify the following expenditures and receipts as capital or revenue:
Q.A second hand car is purchased for Rs. 10,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owner’s name and Rs. 1,200 is paid as dealer’s commission. The amount debited to car account will be
- a)Rs. 10,000.
- b)Rs. 10,500.
- c)Rs. 11,500.
- d)Rs. 12,700.
Correct answer is option 'D'. Can you explain this answer?
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Classify the following expenditures and receipts as capital or revenue...
Classification of Expenditures and Receipts:
- Purchase of second hand car: capital expenditure
- Repairs: revenue expenditure
- Registration: capital expenditure
- Dealer's commission: revenue expenditure
Calculation of Amount Debited to Car Account:
- Cost of car: Rs. 10,000
- Repairs: Rs. 1,000
- Registration: Rs. 500
- Dealer's commission: Rs. 1,200
- Total: Rs. 12,700
Therefore, the amount debited to car account will be Rs. 12,700.
Explanation:
The purchase of a second hand car is a capital expenditure as it results in the acquisition of an asset that is expected to provide benefits over a period of time. On the other hand, repairs and dealer's commission are revenue expenditures as they are incurred for the purpose of maintaining the car and facilitating its purchase, respectively. The registration fee is also a capital expenditure as it is a one-time expense incurred to establish legal ownership of the car.
When calculating the amount debited to the car account, all of these expenditures must be taken into account. In this case, the total of all expenditures is Rs. 12,700, which is the amount that will be debited to the car account.
- Purchase of second hand car: capital expenditure
- Repairs: revenue expenditure
- Registration: capital expenditure
- Dealer's commission: revenue expenditure
Calculation of Amount Debited to Car Account:
- Cost of car: Rs. 10,000
- Repairs: Rs. 1,000
- Registration: Rs. 500
- Dealer's commission: Rs. 1,200
- Total: Rs. 12,700
Therefore, the amount debited to car account will be Rs. 12,700.
Explanation:
The purchase of a second hand car is a capital expenditure as it results in the acquisition of an asset that is expected to provide benefits over a period of time. On the other hand, repairs and dealer's commission are revenue expenditures as they are incurred for the purpose of maintaining the car and facilitating its purchase, respectively. The registration fee is also a capital expenditure as it is a one-time expense incurred to establish legal ownership of the car.
When calculating the amount debited to the car account, all of these expenditures must be taken into account. In this case, the total of all expenditures is Rs. 12,700, which is the amount that will be debited to the car account.
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Classify the following expenditures and receipts as capital or revenue:Q.A second hand car is purchased for Rs. 10,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owners name and Rs. 1,200 is paid as dealers commission. The amount debited to car account will bea)Rs. 10,000.b)Rs. 10,500.c)Rs. 11,500.d)Rs. 12,700.Correct answer is option 'D'. Can you explain this answer?
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Classify the following expenditures and receipts as capital or revenue:Q.A second hand car is purchased for Rs. 10,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owners name and Rs. 1,200 is paid as dealers commission. The amount debited to car account will bea)Rs. 10,000.b)Rs. 10,500.c)Rs. 11,500.d)Rs. 12,700.Correct answer is option 'D'. Can you explain this answer? 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 Classify the following expenditures and receipts as capital or revenue:Q.A second hand car is purchased for Rs. 10,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owners name and Rs. 1,200 is paid as dealers commission. The amount debited to car account will bea)Rs. 10,000.b)Rs. 10,500.c)Rs. 11,500.d)Rs. 12,700.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Classify the following expenditures and receipts as capital or revenue:Q.A second hand car is purchased for Rs. 10,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owners name and Rs. 1,200 is paid as dealers commission. The amount debited to car account will bea)Rs. 10,000.b)Rs. 10,500.c)Rs. 11,500.d)Rs. 12,700.Correct answer is option 'D'. Can you explain this answer?.
Classify the following expenditures and receipts as capital or revenue:Q.A second hand car is purchased for Rs. 10,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owners name and Rs. 1,200 is paid as dealers commission. The amount debited to car account will bea)Rs. 10,000.b)Rs. 10,500.c)Rs. 11,500.d)Rs. 12,700.Correct answer is option 'D'. Can you explain this answer? 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 Classify the following expenditures and receipts as capital or revenue:Q.A second hand car is purchased for Rs. 10,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owners name and Rs. 1,200 is paid as dealers commission. The amount debited to car account will bea)Rs. 10,000.b)Rs. 10,500.c)Rs. 11,500.d)Rs. 12,700.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Classify the following expenditures and receipts as capital or revenue:Q.A second hand car is purchased for Rs. 10,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owners name and Rs. 1,200 is paid as dealers commission. The amount debited to car account will bea)Rs. 10,000.b)Rs. 10,500.c)Rs. 11,500.d)Rs. 12,700.Correct answer is option 'D'. Can you explain this answer?.
Solutions for Classify the following expenditures and receipts as capital or revenue:Q.A second hand car is purchased for Rs. 10,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owners name and Rs. 1,200 is paid as dealers commission. The amount debited to car account will bea)Rs. 10,000.b)Rs. 10,500.c)Rs. 11,500.d)Rs. 12,700.Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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ample number of questions to practice Classify the following expenditures and receipts as capital or revenue:Q.A second hand car is purchased for Rs. 10,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owners name and Rs. 1,200 is paid as dealers commission. The amount debited to car account will bea)Rs. 10,000.b)Rs. 10,500.c)Rs. 11,500.d)Rs. 12,700.Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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