{"id":92017,"date":"2025-06-01T11:12:12","date_gmt":"2025-06-01T11:12:12","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=92017"},"modified":"2025-06-01T11:12:12","modified_gmt":"2025-06-01T11:12:12","slug":"with-reference-to-the-expenditure-made-by-an-organisation-or-a-company","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-expenditure-made-by-an-organisation-or-a-company\/","title":{"rendered":"With reference to the expenditure made by an organisation or a company"},"content":{"rendered":"<p>With reference to the expenditure made by an organisation or a company, which of the following statements is\/are correct?<\/p>\n<ul>\n<li>1. Acquiring new technology is capital expenditure.<\/li>\n<li>2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure.<\/li>\n<\/ul>\n<p>Select the correct answer using the code given below:<\/p>\n<p>[amp_mcq option1=&#8221;1 only&#8221; option2=&#8221;2 only&#8221; option3=&#8221;Both 1 and 2&#8243; option4=&#8221;Neither 1 nor 2&#8243; correct=&#8221;option1&#8243;]<\/p>\n<div class=\"psc-box-pyq-exam-year-detail\">\n<div class=\"pyq-exam\">\n<div class=\"psc-heading\">This question was previously asked in<\/div>\n<div class=\"psc-title line-ellipsis\">UPSC IAS &#8211; 2022<\/div>\n<\/div>\n<div class=\"pyq-exam-psc-buttons\"><a href=\"\/pyq\/pyq-upsc-ias-2022.pdf\" target=\"_blank\" class=\"psc-pdf-button\" rel=\"noopener\">Download PDF<\/a><a href=\"\/pyq-upsc-ias-2022\" target=\"_blank\" class=\"psc-attempt-button\" rel=\"noopener\">Attempt Online<\/a><\/div>\n<\/div>\n<section id=\"pyq-correct-answer\">Option A is correct.<\/section>\n<section id=\"pyq-key-points\">Capital expenditure (Capex) is an investment in assets that will provide long-term benefits to an organization, typically for more than one accounting period. Revenue expenditure provides benefits only in the current period.<\/section>\n<section id=\"pyq-additional-information\">Statement 1 is correct. Acquiring new technology, such as purchasing machinery, software, or investing in R&#038;D that leads to patents or processes, is considered capital expenditure because it creates a long-term asset or enhances future productivity and efficiency for the organization beyond the current financial year.<br \/>\nStatement 2 is incorrect. Debt financing (taking loans) and equity financing (issuing shares) are methods of raising funds for a company. They are balance sheet transactions (affecting liabilities and equity). The funds raised might be used for either capital expenditure (buying assets) or revenue expenditure (paying salaries, rent, etc.). The financing method itself (debt or equity) is not classified as capital or revenue *expenditure*.<\/section>\n","protected":false},"excerpt":{"rendered":"<p>With reference to the expenditure made by an organisation or a company, which of the following statements is\/are correct? 1. Acquiring new technology is capital expenditure. 2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure. Select the correct answer using the code given below: [amp_mcq option1=&#8221;1 only&#8221; option2=&#8221;2 only&#8221; option3=&#8221;Both &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"With reference to the expenditure made by an organisation or a company\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-expenditure-made-by-an-organisation-or-a-company\/#more-92017\">Detailed Solution<span class=\"screen-reader-text\">With reference to the expenditure made by an organisation or a company<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1092],"tags":[1108,1120,1174],"class_list":["post-92017","post","type-post","status-publish","format-standard","hentry","category-upsc-ias","tag-1108","tag-economic-development","tag-national-income-gross-domestic-product","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>With reference to the expenditure made by an organisation or a company<\/title>\n<meta name=\"description\" content=\"Option A is correct. Capital expenditure (Capex) is an investment in assets that will provide long-term benefits to an organization, typically for more than one accounting period. Revenue expenditure provides benefits only in the current period.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-expenditure-made-by-an-organisation-or-a-company\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"With reference to the expenditure made by an organisation or a company\" \/>\n<meta property=\"og:description\" content=\"Option A is correct. Capital expenditure (Capex) is an investment in assets that will provide long-term benefits to an organization, typically for more than one accounting period. Revenue expenditure provides benefits only in the current period.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-expenditure-made-by-an-organisation-or-a-company\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T11:12:12+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"With reference to the expenditure made by an organisation or a company","description":"Option A is correct. Capital expenditure (Capex) is an investment in assets that will provide long-term benefits to an organization, typically for more than one accounting period. Revenue expenditure provides benefits only in the current period.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-expenditure-made-by-an-organisation-or-a-company\/","og_locale":"en_US","og_type":"article","og_title":"With reference to the expenditure made by an organisation or a company","og_description":"Option A is correct. Capital expenditure (Capex) is an investment in assets that will provide long-term benefits to an organization, typically for more than one accounting period. Revenue expenditure provides benefits only in the current period.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-expenditure-made-by-an-organisation-or-a-company\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T11:12:12+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-expenditure-made-by-an-organisation-or-a-company\/","url":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-expenditure-made-by-an-organisation-or-a-company\/","name":"With reference to the expenditure made by an organisation or a company","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T11:12:12+00:00","dateModified":"2025-06-01T11:12:12+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"Option A is correct. Capital expenditure (Capex) is an investment in assets that will provide long-term benefits to an organization, typically for more than one accounting period. 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