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Giving Reason, State Whether the Following is a Revenue Expenditure Or a Capital Expenditure in a Government Budget: Expenditure of Building a Bridge. - Economics

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Question

Giving reason, state whether the following is a revenue expenditure or a capital expenditure in a government budget:

Expenditure of building a bridge.

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Solution

Expenditure incurred on building a bridge is considered a capital expenditure because this expenditure creates an asset and reduces the liabilities of the government.

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2013-2014 (March) Foreign Set 2

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