UPSC Prelims 2022 · GS Paper 1 · Q99

Economy

Medium · Capital versus revenue expenditure

Consider the following statements about a company's expenditure:

1. Money spent by a company to acquire new technology that will be used over several years is treated as capital expenditure.

2. Raising funds through debt is classified as capital expenditure, while raising funds through equity is classified as revenue expenditure.

Which of the statements given above is/are correct?