Expenditure incurred on overhauling a second-hand machinery purchased recently to put it in working condition is: MCQ with Answer and Explanation

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Expenditure incurred on overhauling a second-hand machinery purchased recently to put it in working condition is:

A. Capital Expenditure

B. Loss

C. Revenue Expenditure

D. Deferred Revenue Expenditure

Answer: Option A

Solution (By JKSSB Mock Tests)

All costs incurred before a fixed asset is ready for its intended use are capitalized.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

The objective of social audit is to:

A. Assess the social impact of an organization's activities

B. Ensure compliance with tax laws

C. Maximize profits

D. Detect financial frauds

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Correct Answer: Option A

Explanation:
Social audit evaluates how well an organization achieves its social and environmental goals, assessing its broader impact on society.

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Question #2

A 'Cash Generating Unit' is defined under:

A. AS 14 Amalgamation

B. AS 10 Fixed Assets

C. AS 28 Impairment of Assets

D. AS 2 Inventories

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Correct Answer: Option C

Explanation:
CGU is a concept used in impairment testing under AS 28.

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Question #3

The 'Cost of Inventory' does not include:

A. Storage costs necessary in production process

B. Selling and distribution costs

C. Freight inwards

D. Customs duty

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Correct Answer: Option B

Explanation:
Selling costs are excluded from inventory cost as per AS 2.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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