The purchase price of a software that will be used for more than 12 months should be regarded as ........

Quantitative Aptitude (Pb Patwari) Accountancy

Download Solution PDF

The purchase price of a software that will be used for more than 12 months should be regarded as

a revenue expenditure

a capital expenditure

a long term expense

an accounting period expense

Explanation:

The purchase price of a software that will be used for more than 12 months should be regarded as a capital expenditure. It is considered a capital expenditure when the asset is newly purchased or when money is used towards extending the useful life of an existing asset.