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Sort each transaction as Capital or Revenue.

Exercise and reference answers

Left
Capital
Items
  1. Item
    Purchase of machinery
    Answer
    Capital
  2. Item
    Construction of new factory
    Answer
    Capital
  3. Item
    Purchase of patent rights
    Answer
    Capital
  4. Item
    Salary paid to staff
    Answer
    Revenue
  5. Item
    Office rent paid
    Answer
    Revenue
  6. Item
    Stationery purchased
    Answer
    Revenue
Right
Revenue
Instructions
One-time vs recurring nature.

Explanation

_Source: ICAI BoS Paper 1 Ch 2 'Theoretical Framework' §2.6_
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