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UPSC 2022: 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:
(a)1 only
(b)2 only
(c)Both 1 and 2
(d)Neither 1 nor 2
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Not attemptedCorrect Answer: (a) 1 only
Acquiring new technology creates or enhances an asset and is therefore classified as capital expenditure (Statement 1 true). Debt and equity financing are methods of raising capital (capital receipts), not expenditures; neither is treated as revenue expenditure, so Statement 2 is false. Consequently, only Statement 1 is correct. ([byjus.com](https://byjus.com/free-ias-prep/upsc-exam-comprehensive-news-analysis-oct31-2022/?utm_source=openai))
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What is the correct answer to this UPSC 2022 Indian Economy question?▼
The correct answer is option (a): 1 only. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Fiscal Policy & Budget question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2022, GS Paper 1, as Question 9. It falls under Indian Economy > Fiscal Policy & Budget.
What is the difficulty level of this UPSC question?▼
This question is rated "easy". It tests basic recall and most well-prepared aspirants should answer it correctly.
How many UPSC Prelims questions have been asked from Fiscal Policy & Budget?▼
UPSC has asked 44 questions from Fiscal Policy & Budget (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.