Which of the following should not be treated as revenue expenditure?
ASales tax paid in connection with the purchase of office equipment
BSmall expenditures on long- lived assets, such as ` 20 for a paper weight.
CAnnual fire insurance premiums on Plant and Equipment
DInterest on loans and debentures
Correct answer
A. Sales tax paid in connection with the purchase of office equipment
Explanation
C. A revenue expenditure is an expenditure whose benefit expires within the current accounting period and is in the nature of recurring and is therefore written off to P&L A/c. Sales tax paid in connection with the purchase of office equipment is a non-recurring expenditure whose benefit is going to last for more than one accounting period and hence not a revenue expenditure