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Purchase of shares is related to:
revenue receipt
revenue expenditure
capital receipt
capital expenditure
Here’s an explanation of the options:
- Option 1: Revenue Receipt
- These are incomes earned during the normal course of business, like sales revenues.
- Share purchases don't fit here because they are investments, not regular income.
- Option 2: Revenue Expenditure
- These are short-term expenses for operational needs like rent or utilities.
- Share purchases are not operational expenses; they are investments.
- Option 3: Capital Receipt
- Involves inflows from the sale of fixed assets or investments.
- Buying shares is an outflow, not an inflow.
- Option 4: Capital Expenditure
- ?? Correct Answer: Involves spending on acquiring or upgrading long-term assets.
- Buying shares is a long-term investment, hence a capital expenditure.
By: Milap Bansal ProfileResourcesReport error
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