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InterviewSolution
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Identify the following as revenue expenditure or capital expenditure . Give reasons : (i) Salary paid to government employees . (ii) Purchase of a machine from Korea. (iii) Repayment of loan taken from IMF . (iv) Interest paid on national debt . (v) Interest paid on national debt . (vi) Expenditure on construction of dams. (vi) Social security benefits paid to retired government employees. |
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Answer» (i) It is a revenue expenditure as it neither creates any asset nor reduces any liability of the government . (ii) It is a capital expenditure as it increases assets of the government . (iii) It is a capital expenditure as it reduces the liability of the government . (iv) It is a revenue expenditure as it neither creates any asset nor reduces any liability of the govt. (v) It is a capital expenditure as it increases asset of the government . (vi) It is a revenue expenditure as it neither creates any asset nor reduces any liability of the government . |
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