Question

Legal expenses incurred to purchase land are ______.

Options

• Capital expenditures

• Recurring expenditures

• Revenue expenditures

• None of these

Answer 1

Legal expenses incurred to purchase land are Capital expenditures.

Explanation:

1. Capital expenditure means the expenditure the benefit of which is not exhausted within the current year but is enjoyed over a long time period.
2. Expenses incurred in connection with the purchase of land or building such as fees paid to lawyer or registration fee.