Multiple choice

Expenses incurred on the repairs and white washing for the first time on purchase of an old building are ____ expenditures.

  1. revenue

  2. capital

  3. deferred revenue

  4. deferred capital

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When an old building is purchased, repairs and white washing done 'for the first time' are effectively renovation costs to make the building usable. These expenditures bring the asset to proper working condition and provide benefits over multiple years through the building's useful life. Since they create future benefits beyond the current period, they qualify as capital expenditures, not revenue expenditures.