Which one of the following is an intermediate expenditure? [1](a) Expenditure on maintenance by a firm(b) Purchase of furniture by a firm(c) Purchase of tractor by a farmer

To determine which one of the options is an intermediate expenditure, we need to understand the concept of intermediate expenditure.

Intermediate expenditure refers to the purchase of goods or services that are used in the production process but are not the final product. These expenditures are typically made by businesses or producers.

Let's analyze each option to determine if it qualifies as an intermediate expenditure:

(a) Expenditure on maintenance by a firm: This expenditure is related to the upkeep and repair of existing assets or equipment. While it is necessary for the smooth functioning of the firm, it does not involve the purchase of new goods or services that are used in the production process. Therefore, it is not considered an intermediate expenditure.

(b) Purchase of furniture by a firm: This expenditure involves the acquisition of new furniture, which is used by the firm in its operations. Since furniture is a tangible asset that is used in the production process, it qualifies as an intermediate expenditure.

(c) Purchase of tractor by a farmer: Similarly, the purchase of a tractor by a farmer is an expenditure on a capital asset that is used in agricultural production. As it is a tangible asset used in the production process, it also qualifies as an intermediate expenditure.

Based on the analysis, both options (b) and (c) - the purchase of furniture by a firm and the purchase of a tractor by a farmer - are considered intermediate expenditures.