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Question No. 227Interactive Test Mode
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Q227. With reference to the expenditure made by an organization or a company, which of the following statements is/are correct? 1. Acquiring new technology is capital expenditures. 2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure. Select the correct answer using the code given below.

With reference to the expenditure made by an organization or a company, which of the following statements is/are correct?

  1. Acquiring new technology is capital expenditures.
  2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure. Select the correct answer using the code given below.
Select the correct option below (or cross out options to eliminate)

Official Answer Key & Detailed Solution

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Official UPSC Answer KeyUPSC Prelims 2022 • Indian Economy

Correct Answer: Option (A) — 1 only

Concept & Option Breakdown

Standard Reference Verified

Statement 1 is correct: Capital Expenditure (CapEx) involves spending on the acquisition or upgrading of long-term productive assets, including machinery, infrastructure, and new technology, which yield multi-year economic benefits.

Statement 2 is incorrect: Debt financing and equity financing are modes of raising funds (capital receipts/financing inflows), not expenditures. Repayment of debt principal is a capital expenditure, whereas raising debt or issuing shares generates capital receipts, not revenue expenditure.

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Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2022 (Q227)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Indian Economic Planning & Growth
Official Answer KeyOption (A) — 1 only

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Frequently Asked Questions — UPSC Prelims 2022 Q227

What is the official answer for UPSC Prelims 2022 GS Paper I Question 227 (Indian Economy)?

The official UPSC answer key for this 2022 Indian Economy (Indian Economic Planning & Growth) question is Option (A): "1 only". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2022 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "Indian Economic Planning & Growth". You can explore all repeated questions from Indian Economic Planning & Growth in Acme AI's 3D Prelims PYQ Realm or practice 50 full-length and sectional tests in the APT Prelims Test Series.

How can I solve this Indian Economic Planning & Growth UPSC Prelims question using option elimination?

To solve Indian Economic Planning & Growth questions in UPSC Prelims, identify extreme modifiers, verify core NCERT conceptual definitions, and eliminate mutually contradictory statement pairs before locking your final option.

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