PRC-1 · Chapter 6 · Question 52 of 100
How should the annual motor vehicle tax paid immediately after the purchase of a new delivery car be classified in the financial records?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Revenue expenditure
Explanation
Annual motor vehicle tax is a recurring operational cost required to legally drive the vehicle. It does not enhance the vehicle's capacity or life, so it is classified as revenue expenditure and expensed immediately.
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