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| 1. |
Is the following revenue expenditure or capital expenditure in the context of government budget ? Give reason. (i) Expenditure on collection of taxes. (ii) Expenditure on purchasing computers. |
| Answer» SOLUTION :i) EXPENDITURE on collection of taxes It is a revenue expenditure, as it does not reduce any government liability nor increases government asset.(ii) Expenditure on purchasing computers It is a capital expenditure, as it creates PHYSICAL ASSETS for the government. | |