The correct answer is D. None of the above.
Capital expenditure is the cost of acquiring or improving fixed assets, such as land, buildings, and equipment. Revenue expenditure is the cost of goods and services that are consumed in the current period, such as salaries, wages, and utilities.
Converting capital expenditure into revenue expenditure is not a valid accounting treatment. It would result in an understatement of assets and an overstatement of expenses. This would make the company’s financial statements misleading.
Secret reserve is a reserve that is not disclosed in the financial statements. It is created by overstating expenses or understating assets. Secret reserves are often used to manage earnings or to hide losses.
Capital reserve is a reserve that is created from capital profits. It is not available for distribution to shareholders. Capital reserves are often used to finance future capital expenditure.
Revenue expenditure is the cost of goods and services that are consumed in the current period. It is recorded in the income statement as an expense.
I hope this helps!