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Question
Construction of railway line is a type of ______ expenditure.
Options
Capital
Revenue
Primary
All of these
MCQ
Fill in the Blanks
Solution
The construction of railway lines is a type of Capital expenditure.
Explanation:
Railway track construction is a capital expenditure since it creates an asset. Capital expenditure is an expenditure that either develops assets for the government or reduces the government's liabilities. Any one of the aforementioned conditions must be met for capital expenditure to occur, hence it refers to spending that results in the production of assets and the reduction of obligations. This type of investment is made over a long period of time.
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Classification of Expenditure
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