Accounting Multiple Choice Question – 30 March 2021

Which item should be treated as capital expenditure?

Select ONE answer:

1. the addition of a back-up system on an existing computer at a cost of £900
2. costs incurred in repairing a car when the costs cannot be recovered from the insurance company
3. rent paid on a factory, whilst the company negotiated the purchase of that same factory
4. the replacement of a wooden fence with a new fence

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct 
2. Not correct
3. Not correct
4. Not correct

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