Giving reason and identify whether the following are final expenditure

1.	Giving reason and identify whether the following are final expenditure or intermediate expenditure: (i) Expenditure on maintenance of an office building. (ii) Expenditure on improvement of a machine in a factory.
Answer» i) Expenditure on maintenance of an office building- Final Expenditure Reason- It is for consumption purpose, so it is considered as final expenditure. (ii) Expenditure on improvement of a machine in a factory - Final expenditure. Reason - It is a kind of Capital investment. So it is considered as final expenditure.

Giving reason and identify whether the following are final expenditure or intermediate expenditure: (i) Expenditure on maintenance of an office building. (ii) Expenditure on improvement of a machine in a factory.

Answer»

i) Expenditure on maintenance of an office building- Final Expenditure

Reason- It is for consumption purpose, so it is considered as final expenditure.

(ii) Expenditure on improvement of a machine in a factory - Final expenditure.

Reason - It is a kind of Capital investment. So it is considered as final expenditure.