Identify the following as revenue expenditure or capital expenditure . Give reasons : (i) Salary paid to government employees . (ii) Purchase of a mac
Identify the following as revenue expenditure or capital expenditure . Give reasons :
(i) Salary paid to government employees .
(ii) Purchase of a machine from Korea.
(iii) Repayment of loan taken from IMF .
(iv) Interest paid on national debt .
(v) Interest paid on national debt .
(vi) Expenditure on construction of dams.
(vi) Social security benefits paid to retired government employees.
1 Answers
(i) It is a revenue expenditure as it neither creates any asset nor reduces any liability of the government .
(ii) It is a capital expenditure as it increases assets of the government .
(iii) It is a capital expenditure as it reduces the liability of the government .
(iv) It is a revenue expenditure as it neither creates any asset nor reduces any liability of the govt.
(v) It is a capital expenditure as it increases asset of the government .
(vi) It is a revenue expenditure as it neither creates any asset nor reduces any liability of the government .