Bhawna went to her old school in New Delhi, where she noticed that there is new building being constructed by the government. According to you, how will this transaction be treated?

Included in capital expenditure

The correct answer is option 3: Included in capital expenditure

The construction of a new building by the government is considered capital expenditure because it involves spending on acquiring or improving physical assets, which are expected to provide long-term benefits and value. This type of expenditure is aimed at creating or enhancing infrastructure and is recorded as an investment in the government’s capital assets.