CA Foundation Exam > CA Foundation Questions > Amount spent on increasing the seating capaci...
Start Learning for Free
Amount spent on increasing the seating capacity in cinema hall is:-
- a)Capital Expenditure
- b)Revenue Expenditure
- c)Deferred Revenue Expenditure
- d)None of the above.
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
Amount spent on increasing the seating capacity in cinema hall is:-a)C...
Answer: (A) Capital expenditure
Description: Amount spent on increasing the seating capacity is a capital expenditure as this expenditure proposes to increase the capacity which is a long - term benefit for the organisation.
Most Upvoted Answer
Amount spent on increasing the seating capacity in cinema hall is:-a)C...
Capital Expenditure
Capital expenditure refers to the amount spent on acquiring or improving a non-current asset that will provide a long-term benefit to the business. The expenditure is incurred with the aim of increasing the earning capacity of the business, rather than for day-to-day expenses.
Explanation:
Increasing the seating capacity in a cinema hall involves significant expenditure on construction, renovation, and installation of new seats. This expenditure is incurred with the aim of increasing the earning capacity of the cinema hall in the long run, as more customers can be accommodated. Hence, it falls under the category of capital expenditure.
Benefits of capital expenditure:
- It helps to increase the earning capacity of the business in the long run.
- It improves the efficiency and productivity of the business.
- It enhances the quality of goods or services provided by the business.
- It helps to maintain the competitive position of the business in the market.
Conclusion:
In conclusion, the amount spent on increasing the seating capacity in a cinema hall is classified as capital expenditure. It is important for businesses to distinguish between capital and revenue expenditure, as it affects their financial statements and tax liabilities. Capital expenditure is a long-term investment that provides a lasting benefit to the business, while revenue expenditure is a short-term expense that is incurred for day-to-day operations.
Capital expenditure refers to the amount spent on acquiring or improving a non-current asset that will provide a long-term benefit to the business. The expenditure is incurred with the aim of increasing the earning capacity of the business, rather than for day-to-day expenses.
Explanation:
Increasing the seating capacity in a cinema hall involves significant expenditure on construction, renovation, and installation of new seats. This expenditure is incurred with the aim of increasing the earning capacity of the cinema hall in the long run, as more customers can be accommodated. Hence, it falls under the category of capital expenditure.
Benefits of capital expenditure:
- It helps to increase the earning capacity of the business in the long run.
- It improves the efficiency and productivity of the business.
- It enhances the quality of goods or services provided by the business.
- It helps to maintain the competitive position of the business in the market.
Conclusion:
In conclusion, the amount spent on increasing the seating capacity in a cinema hall is classified as capital expenditure. It is important for businesses to distinguish between capital and revenue expenditure, as it affects their financial statements and tax liabilities. Capital expenditure is a long-term investment that provides a lasting benefit to the business, while revenue expenditure is a short-term expense that is incurred for day-to-day operations.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. Can you explain this answer?
Question Description
Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. 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 Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. 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 Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. Can you explain this answer?.
Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. 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 Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. 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 Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. Can you explain this answer?.
Solutions for Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Amount spent on increasing the seating capacity in cinema hall is:-a)Capital Expenditureb)Revenue Expenditurec)Deferred Revenue Expenditured)None of the above.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup