Which of the following is NOT an example of capital expenditure incurred by the Government?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Expenditure on maintenance of a government school building
Maintenance expenditures are typically classified as revenue expenditures because they do not create new assets or significantly improve existing ones; instead, they sustain the current functionality of an asset.
Capital Expenditure: There are expenditures of the government which result in creation of physical or financial assets or reduction in financial liabilities. This includes expenditure on the acquisition of land, building, machinery, equipment, investment in shares, and loans and advances by the central government to state and union territory governments, PSUs and other parties.
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