Question

Giving reason and identify whether the following are final expenditure or intermediate expenditure:

(i) Expenditure on maintenance of an office building.

(ii) Expenditure on improvement of a machine in a factory.

Answer 1

i) Expenditure on maintenance of an office building- Final Expenditure

Reason- It is for consumption purpose, so it is considered as final expenditure.

(ii) Expenditure on improvement of a machine in a factory - Final expenditure.

Reason - It is a kind of Capital investment. So it is considered as final expenditure.