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Which of these is a CAPITAL transaction?
APurchase of machinery
BPayment of rent
CPurchase of stationery
DPayment of salaries
Answer & Solution
Correct answer: A. Purchase of machinery
1. Per OCR examples: capital expenditure = purchase of machinery, construction of plant, significant repairs.
2. Rent, stationery, salaries = revenue expenditure (recurring, single-period).
3. Capital = long-term effect.
_Source: ICMAI BoS CMA Foundation Paper 2 (FFCA) — Paper2_07042026.pdf, Module 1 §1.3.1 (page 20)_