WAEC Accounting 2012 Paper

Concept:Recurrent expenditure is spending on items that do not create or acquire fixed assets, such as salaries and consumable supplies.Explanation:Identify the items that are recurrent, not capital. Construction and hospital wards $\& 300,000$ is capital expenditure because it creates a fixed asset. Purchase of hospital beds $\& 40,000$ is capital expenditure because beds are fixed assets. Salaries and wages $\& 80,000$ are recurrent expenditure. Purchase of drugs $\& 55,000$ is recurrent expenditure because drugs are consumed. Purchase of x-ray machine $\& 150,000$ is capital expenditure because it is a fixed asset. Add the recurrent items: $80,000 + 55,000 = 135,000$. Therefore, the amount of recurrent expenditure is $\text{Le }135,000$.Answer:C. Le 135,000