Which of the following is of capital nature?

Correct option is B

Rent of premises can be considered a capital nature expense under specific contexts, such as when it is paid in advance for a long-term lease or contributes to acquiring an asset. In most regular accounting, rent is treated as a revenue expense; however, if it is connected to acquiring the premises or a lease right for business, it may become capitalized.

Information Booster:

1. Capital expenditures result in long-term benefits and are usually non-recurring.
2. Rent paid for premises acquisition or advance lease payments may be treated as capital nature.
3. Typical revenue expenses like regular rent, wages, and electricity charges are excluded unless tied to asset acquisition or enhancement.
4. The classification often depends on the context of the payment in the accounting framework.

Additional Knowledge:

• (a) Commission on purchases: Classified as a revenue expense, part of operating costs.
• (b) Rent of premises: Capitalized if it contributes to asset acquisition (e.g., leasehold property).
• (c) Electricity charges: Always a revenue expense as it relates to operational costs.