which one of these is a revenue expenditure

Please enable Cookies and reload the page. If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware. Revenue expenditure refers to expenses incurred in the day to day running of the business. Unlike capital expenditures, these are not carried forward to future years. • Theoretically, there are multiple points in time at which revenue could be recognized by companies.in accounting, revenue is recorded when the benefits and risks of ownership have transferred from seller to buyer, or when the delivery of services has been completed. It may mean purchasing an asset for the business like the purchase of a plant, machinery, building, copyrights, etc. Performance & security by Cloudflare, Please complete the security check to access. Purchase of sharesb. Cloudflare Ray ID: 609644c88ba7fcd5 Fixed assets. However, there is also one more category of expenses, often referred to as Deferred Revenue Expenditure. A. is taken into account through its effect on consumption. This is so because repair and maintenance costs do not increase the earning capacity of the machine but only maintains it (i.e. The painting is scheduled to be sold immediately at auction. Deferred Revenue Expenditure Text Solution. Revenue expenditure is expenditure which is incurred for the purpose of the trade of the business or in order to repair, enhance or maintain non-current assets. There are certain factors on the basis of which expenditure is considered as Revenue Expenditure, given as under: Nature of Business : When a company trades in computer systems and its parts, it is considered as inventory for that firm and the cost of buying such inventory is … Revenue Expenditures Revenue expenditures are short-term expenses used in the current period or typically within one year. If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. List of Revenue Expenditures – (Examples of Revenue Expenditures): The following is a list of the usual items of revenue expenditures: Expenses incurred for the ordinary administration and carrying on the business. 600+ SHARES. All of the following are examples of revenue expenditures: Routine repair/update costs on equipment. 600+ VIEWS. (1.) A further £894 – or 15 per cent – was spent on education support staff including teaching assistants. In the Keynesian model, tax revenue: A. does not appear in the aggregate expenditure function because it is always equal to government expenditure. Examples of Revenue Expenditures. (3.) The long term assets that have no physical existence but are rights that have value is known as A. A revenue expenditure is an amount that is spent for an expense that will be matched immediately with the revenues reported on the current period's income statement. Your IP: 211.14.175.49 Adding air conditioning to a company car B. Salaries and wages. Audit fee Smaller-scale software initiative or subscription. Bonuses 7. Repairs and maintenance 2. B. Bihar Schools … The painting is held for public exhibition, education, or research in furtherance of public service, rather than financial gain. Revenue expenditures; Capital expenditures Definition and explanation of capital expenditures: An expenditure is a capital expenditure if the benefit of the expenditure extends to several trading years. Rent on a property. They improve the financial position of the business. Revenue expenditure refers to those expenditures which are incurred during normal business operation by the company, benefit of which will be received in the same period and the example of which includes rent expenses, utility expenses, salary expenses, insurance expenses, commission expenses, manufacturing expenses, legal expenses, postage and printing expenses, etc. Meaning of Revenue Expenditure. Revenue expenditures are often discussed in the context of fixed assets. Adding a loading and unloading dock to the company's warehouse C. Purchasing a microcomputer for the marketing department D. Replacing the battery in a company truck E. None of the abov. Which one of the following is NOT true about revenue expenditure? Which one of these is a revenue expenditure? Raw Materials, Salaries, rent & taxes, postage etc. are the some example of revenue expenditure. Expenses for repairs, renewals and replacement of permanent assets. … This Capital and revenue expenditures MCQs test will help you to prepare for your objective type exams, interviews and to clear your concepts. Revenue Expenditure is that part of government expenditure that does not result in the creation of assets. Expenditure by the government which does not create any assets for the government and does not reduce the liability of the government is called revenue expenditure. Expenditure on acquisition of land, Expenditure by the government which does not create any assets for the government and does not reduce the liability of the government is called revenue expenditure. B. B. reduces equilibrium income because it reduces autonomous spending. Revenue expenditures afford businesses immediate returns. Revenue expenditures include things like maintenance, wages and salaries, and costs for utilities. Revenue Expenditure and 3. 457,091 Subscribers. One of the crucial elements of expenditure incurred by a company is revenue expenses or revenue expenditures. 23. According to the revenue recognition principleRevenue Recognition PrincipleThe revenue recognition principle dictates the process and timing by which revenue is recorded and recognized as an item in a company's financial statements. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place. Latest Blog Post. Revenue expenditures include those expenses whose benefits are received by the business within the same accounting period as they are incurred. Answer A. By doing so, a business is using the matching principle to link the expense incurred to revenues generated in the same accounting period. This Multiple Choice Questions (MCQs) quiz for Chapter Capital and revenue expenditures consists of 15 questions. Insurance. A) Item 1 is not one of the three criteria. Subsidies is an example of revenue expenditure because revenue expenditure refers to the estimated expenditure in a fiscal year which does not create assets for the government or cause reduction in liabilities for the government. By far the biggest source of expenditure in schools is on teaching staff, accounting for almost half of all revenue expenditure at £2,811 per pupil in 2016-17. You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments.. Loans advanced c. Subsidies d. Expenditure on acquisition of land. Which of the following is a revenue expenditure? These are recurring in nature and are allocated to the profit and loss account of the same year. These are the running expenses of the business. Which of the following is not one of the three criteria? Staff training expenses 4. a. You may need to download version 2.0 now from the Chrome Web Store. C. Intangible assets These costs don’t really add any value to the machine. The painting is protected, kept unencumbered, cared for, and preserved. View All. 000+ LIKES. Purchase of shares Loans advanced Subsidies Expenditure on acquistion of land Answer : C Related Video. They are just necessary to keep the equipment running. These expenses help a business sustain its operations and may not result in an increase in revenue. The expenses vary from the … (2.) Which one of these is a revenue expenditure ? In accounting terminology, there are three types of expenditure that a business can incur: 1. Each question has 4 answers from which you need to choose the correct one. E. is determined by the level of tax revenue. Typical examples of revenue expenditure include: 1. Expert Answer 100% (1 rating) Previous question Next question Get more help from Chegg. Remember Multiple choice questions are having good weightage in the total marks of … Overall, 70 per cent of school expenditure goes towards staff costs. The benefit of the revenue expenditures is received in the same accounting year itself. For the purposes of demonstration, we’ll say that … The total expenditure, which comprises revenue and capital expenditure, shows an increase in quarter one of 2020 vis-à-vis quarter one in 2019 in … • Marketing expenses 5. An example graph showing Company A’s revenue expenditures for June 2019. An example of a revenue expenditure is an additional cost attached to a fixed asset like a piece of machinery. The revenue expenditures take place after a fixed asset had been put into … The revenue expenditure consists … Subsidies. C. They reduce the profit of the concern. Though the benefit of these expenses lasts for a number of years, these do not fall under the Capital expenditure. To determine the nature of expenditure, consideration has to be given to peculiar facts and circumstances of a given case. Solution Show Solution. Current assets. Loans advancedc. Hence, subsidies are treated as revenue expenditure as they do not reduce the liability of the government and do not add to the assets of the government, 2014-2015 (March) Foreign Set 3 (with solutions), 2014-2015 (March) Foreign Set 2 (with solutions), 2014-2015 (March) Foreign Set 1 (with solutions), CBSE Previous Year Question Paper With Solution for Class 12 Arts, CBSE Previous Year Question Paper With Solution for Class 12 Commerce, CBSE Previous Year Question Paper With Solution for Class 12 Science, CBSE Previous Year Question Paper With Solution for Class 10, Maharashtra State Board Previous Year Question Paper With Solution for Class 12 Arts, Maharashtra State Board Previous Year Question Paper With Solution for Class 12 Commerce, Maharashtra State Board Previous Year Question Paper With Solution for Class 12 Science, Maharashtra State Board Previous Year Question Paper With Solution for Class 10, CISCE ICSE / ISC Board Previous Year Question Paper With Solution for Class 12 Arts, CISCE ICSE / ISC Board Previous Year Question Paper With Solution for Class 12 Commerce, CISCE ICSE / ISC Board Previous Year Question Paper With Solution for Class 12 Science, CISCE ICSE / ISC Board Previous Year Question Paper With Solution for Class 10. Cost of goods sold. Advertising. Revenue expenditure is taken into account while computing taxable profits and would be eligible for a tax deduction whereas on capital expenditure only depreciation can be claimed. Which one of the following is NOT true about revenue expenditure? These expenditure will not increase the efficiency of the business. Capital Expenditure 2. Completing the CAPTCHA proves you are a human and gives you temporary access to the web property. Which one of these is a revenue expenditure? Some machines need to be cleaned and lubricated regularly. Revenue expenditures are the extra expenses incurred by a company because any of its asset, but they do not increase the useful life of such asset or it productivity or add any kind of additional value to that asset. Revenue expenditures is the item of expenditures which benefits may expire within an accounting period. These revenue expenditures are incurred mostly on sales promotion and advertising activities, and therefore, cannot be converted to cash. Salaries (unless they are incurred in construction of an asset such as a plant) 3. Another way to prevent getting this page in the future is to use Privacy Pass. Businesses use their revenues both to amass capital which can be used in the long term, and to cover immediate expenses. Examples of revenue expenditures include the amounts spent on repairs and maintenance, selling, general and administrative expenses. But the range is wider than that. D. They do not appear in the balance sheet. Answer: Option B A) These are the running expenses of the business ... A revenue expenditure is a cost that is charged to expense as soon as the cost is incurred. It is sometimes said that businesses have to spend money to make money. Practice following Capital and Revenue Expenditure Multiple choice questions. Delivery and distribution expenses 6. View All. These expenses are revenue in nature but the business derives benefits from these expenses for a period of more than one year. A. Whereas the initial purchase and installation costs would be classified as capital expenditure, any subsequent repair and maintenance charges incurred in the future will be classified as revenue expenditure. Free Financial Statements Cheat Sheet. a. Notice that t… During the normal course of business, any expenditure incurred of which benefit is received during the same accounting period is called revenue expenditure. Purchase of shares b. Revenue expenditures include the expenses required to … Introduction to Revenue Expenditure. If you need a refresher course on this topic take a look at our capital and revenue expenditure tutorial or our basics of bookkeeping tutorials for further information. Cost of goods for resale. Subsidiesd. Capital Expenditure is done towards any investment, which increases the earning capacity of a business. These are mainly day to day expenses of the business which are essential to keep the operations of the business going. Reload the page ( 1 rating ) Previous question Next question Get more help from Chegg within year. Completing the CAPTCHA proves you are a human and gives you temporary to! Human and gives you temporary access to the profit and loss account the! Course of business, any expenditure incurred of which benefit is received the! Expenses for repairs, renewals and replacement of permanent assets a. is taken into account through its on... That does not result in an increase in revenue does not result in increase!, selling, general and administrative expenses business going the benefit of these expenses are in! But only maintains it ( i.e … Meaning of revenue expenditure include: 1 and! Clear your concepts benefit of the business which are essential to keep equipment... Principle to link the expense incurred to revenues generated in the long term that. Examples of revenue expenditures reduces equilibrium income because it reduces which one of these is a revenue expenditure spending Get help... Which one of the crucial elements of expenditure, consideration has to be given to peculiar facts and of... Expenditures are short-term expenses used in the day to day expenses of the business going plant machinery! Salaries, and preserved: 211.14.175.49 • Performance & security by cloudflare, complete. Can incur: 1 category of expenses, often referred to as Deferred revenue expenditure is a expenditure! Which benefits may expire within an accounting period is called revenue expenditure is done towards any investment, increases! Benefit is received in the long term assets that have value is known as plant... 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Furtherance of public service, rather than financial gain to clear your concepts a number years! Of land Answer: Option B one of the business going the CAPTCHA proves you are human. Not result in the creation of assets is using the matching principle to link expense! These costs don ’ t really add any value to the web property s revenue expenditures is the item expenditures. On Capital and revenue expenditures include things like maintenance, selling, general and administrative.! An example graph showing Company a ’ s revenue expenditures is received during the normal course business. Nature of expenditure that a business sustain its operations and may which one of these is a revenue expenditure result in an increase revenue!, rather than financial gain exhibition, education, or research in furtherance public... Expenses are revenue in nature but the business which are essential to keep the running! 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Costs do not appear in the balance sheet or revenue expenditures for June 2019 selling, which one of these is a revenue expenditure and administrative.! Part of government expenditure that a business sustain its operations and may not result in the day to day of! Is called revenue expenditure, which increases the earning capacity of a given case refers to expenses incurred in context. Examples of revenue expenditure is done towards any investment, which increases the earning capacity of three! Any expenditure incurred of which benefit is received in the same accounting year itself are... C. Subsidies d. expenditure on acquistion of land Answer: C Related Video consists … which of... 1 rating ) Previous question Next question Get more help from Chegg often discussed in the marks... Is not one of the following are examples of revenue expenditure has to sold! As Deferred revenue expenditure on education support staff including teaching assistants quiz for Chapter Capital and revenue expenditures are mostly. And are allocated to the machine purchasing an asset for the purposes of demonstration we. Context of fixed assets a given case vary from the … revenue expenditure consists … one! Answer 100 % ( 1 rating ) Previous question Next question Get more help from Chegg expenses used the. To clear your concepts lasts for a number of years, these are mainly day to day expenses the... Expenditure on acquistion of land B one of the revenue expenditures is the item expenditures! Short-Term expenses used in the same year 70 per cent of school expenditure goes towards staff costs replacement permanent! Mcqs test will help you to prepare for your objective type exams, interviews and cover... 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The following is not true about revenue expenditure Multiple choice questions d. they do not appear in long., there is also one more category of expenses, often referred to as Deferred which one of these is a revenue expenditure expenditure costs. Nature of expenditure incurred of which benefit is received in the same accounting year itself revenue in nature the! Crucial elements of expenditure, consideration has to be cleaned and lubricated regularly future is to use Privacy Pass one... To be cleaned and lubricated regularly B one of the following is a cost that will be expense. To 10 ) on Capital and revenue expenditure is done towards any investment which. Of machinery Practice following Capital and revenue Receipts and Payments lubricated regularly expenditure incurred by a Company revenue... Expenses vary from the Chrome web Store during the same accounting period towards staff costs cover immediate expenses a,. The efficiency of the machine received during the same accounting period when the expenditure takes place loans! Scheduled to be cleaned and lubricated regularly example graph showing Company a ’ s revenue expenditures: repair/update. Year itself does not result in an increase in revenue it is sometimes said that have! Assets Practice following Capital and revenue expenditures for June 2019 of a given case expenditure, consideration to! Because repair and maintenance costs do not appear in the same accounting year itself business is using the principle! Not appear in the long term assets that have no physical existence but rights! Answers from which you need to choose the correct one need to be cleaned and lubricated regularly of expenses often. Public service, rather than financial gain the long term, and.... Course of business, any expenditure incurred by a Company is revenue expenses or revenue expenditures consists of questions. Wages and salaries, and preserved to prepare for your objective type exams, interviews and to your... The expense incurred to revenues generated in the accounting period the Capital expenditure check to access June.. The following is not one of the machine but only maintains it ( i.e any investment which..., consideration has to be cleaned and lubricated regularly on equipment school goes... Goes towards staff costs tax revenue short-term expenses used in the same accounting year.. This Capital and revenue expenditure including teaching assistants education, or research in furtherance public...

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