A government department incurs an expenditure of ₹5,00,000 on the repair of a building. Under the General Financial Rules (GFR), this expenditure should be classified as:
A. Deferred revenue expenditure, to be written off over 5 years
B. Capital expenditure, as it improves the building
C. Revenue expenditure, as it maintains the existing condition
D. Contingent expenditure
Answer: Option C
Solution (By JKSSB Mock Tests)
Under standard accounting and GFR principles, routine repairs and maintenance that do not increase the capacity or useful life of an asset are classified as revenue expenditure, not capital.
No comments yet. Be the first to start the discussion!