Which of the following should not be treated as revenue expenditure?
A)Interest on loans and debentures
B)Annual fire insurance premiums on Plant and Equipment
C)Sales tax paid in connection with the purchase of office equipment
D)Small expenditures on long- lived assets, such as ` 20 for a paper weight.

Question

Quizplus · Accepted Answer

Sales tax paid in connection with the purchase of office equipment should not be treated as revenue expenditure because it is directly related to the acquisition of a capital asset, thus it should be capitalized as part of the asset's cost rather than expensed as revenue expenditure.

Which of the Following Should Not Be Treated as Revenue