Economics · Accounting Concepts and Principles

Consider the following statements regarding Capital and Revenue Expenditure: Statement I: Any expenditure incurred to acquire a fixed asset or to put it into a usable condition, such as carriage inward and installation charges, is classified as Capital Expenditure. Statement II: Expenditure that only maintains the asset in its existing working condition, such as routine repairs and renewals, must be treated as Revenue Expenditure. Statement III: If an expenditure results in increasing the seating capacity of a cinema hall from 400 to 600, it is treated as Revenue Expenditure because the business remains the same. Statement IV: The cost of dismantling and removing an old machine to make space for a new one is generally capitalized as part of the cost of the new machine. Statement V: Taxes like GST paid on the purchase of raw materials for production are Capital Expenditure because they are paid at the time of purchase. Which of the above statements are correct?