Practicing Success
Practicing Success
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In the question given below there are 2 statements marked as Assertion (A) and Reason (R). Choose the correct alternative from the following options. Assertion (A)- Expenditure on purchasing computers is a capital expenditure. Reason (R)- Purchasing the computer is a capital expenditure as it increases the liability.
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Both (A) and (R) are true and (R) is the correct explanation. Both (A) and (R) are true but (R) is not the correct explanation of (A). (A) Is true but (R) is false. (A) Is false but (R) is true. |
(A) Is true but (R) is false. |
Capital expenditures are those expenditures which reduces the liability or increases the asset. As, purchasing the computers cause an increase in the assets of the government, it would be treated as a capital expenditure. |
