2020 PHS 3E POA EOY P1 Q4

2020 PHS 3E POA EOY P1 Q4

4 The following were payments made by Marilyn in June when she bought a photocopier for the business:

i)  Toner for the copier

$250

ii) Delivery charges 

$100

iii) Installation and technical set-up cost

$200

iv) Annual maintenance cost

$120

REQUIRED

a. Identify if the above payments (i) to (iv) are capital expenditure or revenue expenditure.

[4]

b. State the effects on the statement of financial performance and statement of financial position if a capital expenditure has been wrongly recognised as a revenue expenditure.

[2]

[TOTAL 6]

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