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Zorluk: KolayRecurrent and Capital Expenditure Classification

Match each public sector transaction on the left with its correct expenditure classification on the right.

  • Payment of monthly salaries to ministry civil servantsRecurrent Expenditure — Personal Emoluments
  • Construction of a new interstate highway and bridgeCapital Expenditure — Infrastructure
  • Purchase of office printing paper and daily stationeryRecurrent Expenditure — Overhead Expenses
  • Procurement of specialized medical equipment for a general hospitalCapital Expenditure — Plant and Equipment

Cevap

Payment of monthly salaries matches Recurrent Expenditure — Personal Emoluments; Construction of a new interstate highway and bridge matches Capital Expenditure — Infrastructure; Purchase of office printing paper matches Recurrent Expenditure — Overhead Expenses; Procurement of specialized medical equipment matches Capital Expenditure — Plant and Equipment.
Recurrent expenditures cover short-term operational costs incurred during the current period, divided into personal emoluments (such as salaries) and overhead expenses (such as stationery). Capital expenditures create enduring public assets, divided into physical infrastructure (such as highways) and durable capital items (such as hospital machinery).

Adım Adım Çözüm

1
Identify ongoing operational payments versus long-term asset acquisition.
Salaries and office stationery are ongoing operational costs (recurrent), whereas highway construction and specialized medical equipment are long-term assets (capital).
Public sector expenditure is categorized by economic nature: short-term operational expenses are recurrent, while long-term investments in physical capital are capital expenditures.
2
Sub-classify recurrent expenses into personal emoluments or overheads.
Salaries belong to personal emoluments, while consumable stationery belongs to overhead expenses.
Personal emoluments cover employee compensation, whereas overheads cover administrative running costs.
3
Sub-classify capital expenditures into infrastructure or plant/equipment.
Highways/bridges belong to infrastructure, while medical machinery belongs to plant and equipment.
Public civil engineering works are infrastructure, while durable machinery and medical tools are classified as plant and equipment.

Anahtar Kavram

Distinguishing public sector recurrent expenditure (personal emoluments and overhead costs) from capital expenditure (infrastructure assets and durable equipment).
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