With reference to the expenditure made by an organisation or a company, which of the following statements is/are correct? 1. Acquiring new technology is capital expenditure. 2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure. Select the correct answer using the code given below:

The correct answer is Option 1. Statement 1 is correct because capital expenditure (CapEx) refers to funds used by a company to acquire, upgrade, and maintain physical assets or intangible assets like technology. Since acquiring new technology provides long-term benefits beyond one financial year and enhances the productive capacity of the organization, it is classified as capital expenditure.

Statement 2 is incorrect because both debt and equity financing are methods of raising capital and pertain to the liability or equity side of the balance sheet, rather than the expenditure side. While the repayment of a loan principal is a capital outflow, the act of financing itself is not "expenditure" in the accounting sense.

• Capital Expenditure: Creates assets or reduces liabilities (e.g., buying machinery).
• Revenue Expenditure: Incurred for day-to-day operations (e.g., salaries, rent), providing no long-term asset creation.