Question : Which of the following statement are true?
- Defence capital equipment purchased from Russia is a capital expenditure.
- Grants given to state government is a revenue expenditure.
Option 1: Both are true.
Option 2: Both are false.
Option 3: Statement 1 is true, statement 2 is false.
Option 4: Statement 1 is false, statement 2 is true.
Answer (1)
18th Jan, 2024
Correct Answer:
Both are true.
Solution :
Defence capital equipment purchased from Russia is a capital expenditure as it increases assets of the government.
Grants given to state government is a revenue expenditure as it neither creates any assets nor reduces any liability of the government.
Hence, Option A is correct.
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