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Capital expenditure in an NPO is:
ADebited to I&E Account
BAdded to general surplus
CTreated as cash receipt
DCapitalised on Balance Sheet
Answer & Solution
Correct answer: D. Capitalised on Balance Sheet
1. Capital expenditures create long-term assets.
2. They are capitalised on the Balance Sheet.
3. Only revenue expenditures are debited to I&E.
_Source: ICAI BoS Foundation Paper 1, Ch 8 "NPO", §3 ¶3_
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