Question
Download Solution PDF“Legal expenses incurred to defend a suit for breach of contract to supply goods” is
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe correct answer is Revenue Expenditure.
Key Points Legal expenses incurred to defend a suit for breach of contract to supply goods is a revenue expenditure.
This is because the goods have not been supplied by the business to the customer according to the contract between them.
The customer claimed damages which the business paid. It is a usual thing that happens in ordinary course of trading, so it is a revenue expenditure.
Last updated on May 25, 2025
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