Question : Identify the correct match.
A) Pension to retired government employees - Revenue Receipt
B) Purchase of Machinery in Railways - Capital Expenditure
Option 1: Both A and B
Option 2: Only A
Option 3: Neither A nor B
Option 4: Only B
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Correct Answer: Only B
Solution : The correct answer is Only B .
The term "capital expenditure" describes the money to buy, maintain, or enhance long-term assets to increase productivity or earnings potential. Purchasing new or used machinery is a benefit for the business. Therefore, the cost of the machinery is a capital expense.
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