Question

Cost incurred for the maintenance of a shop is considered as:

• A. Loss
• B. Gain
• C. Capital Expenditure
• D. Revenue Expenditure

Hint:

Routine expenses like repairs or maintenance are classified as Revenue Expenditure and do not add to the asset’s value.

Answer 1

The Correct Option is D

The maintenance cost of a shop is a routine expense that does not enhance the asset’s value or lifespan. It is treated as a Revenue Expenditure, which is debited to the income statement for the accounting period.