Question : Which of the following statements are true?
Statement-1 An expenditure is revenue expenditure, if it either creates an asset or reduces a liability.
Statement-2 An expenditure is a capital expenditure, if it neither creates an asset nor reduces any liability.
Option 1: Both are true.
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 2 is true and statement 1 is false.
Answer (1)
9th Jan, 2024
Correct Answer:
Both are false
Solution :
An expenditure is capital expenditure, if it either creates an asset or reduces a liability.
An expenditure is a revenue expenditure, if it neither creates an asset nor reduces any liability.
Hence option B is correct.
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