Cost of goods for resale. These are mainly day to day expenses of the business which are essential to keep the operations of the business going. 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. 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. Smaller-scale software initiative or subscription. 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. Which of the following is not one of the three criteria? Adding air conditioning to a company car B. … Rent on a property. Revenue expenditures afford businesses immediate returns. Purchase of shares b. Each question has 4 answers from which you need to choose the correct one. Introduction to Revenue Expenditure. Cloudflare Ray ID: 609644c88ba7fcd5 It is sometimes said that businesses have to spend money to make money. The revenue expenditures take place after a fixed asset had been put into … 23. Revenue expenditures include those expenses whose benefits are received by the business within the same accounting period as they are incurred. Capital Expenditure 2. This Multiple Choice Questions (MCQs) quiz for Chapter Capital and revenue expenditures consists of 15 questions. This is so because repair and maintenance costs do not increase the earning capacity of the machine but only maintains it (i.e. D. They do not appear in the balance sheet. 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. Performance & security by Cloudflare, Please complete the security check to access. a. 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. Current assets. You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments.. 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. Revenue Expenditure and 3. • 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. are the some example of revenue expenditure. 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. Subsidiesd. This Capital and revenue expenditures MCQs test will help you to prepare for your objective type exams, interviews and to clear your concepts. Delivery and distribution expenses 6. Examples of revenue expenditures include the amounts spent on repairs and maintenance, selling, general and administrative expenses. Solution Show Solution. E. is determined by the level of tax revenue. 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. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place. 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. By doing so, a business is using the matching principle to link the expense incurred to revenues generated in the same accounting period. The painting is protected, kept unencumbered, cared for, and preserved. Revenue expenditures include the expenses required to … A further £894 – or 15 per cent – was spent on education support staff including teaching assistants. Typical examples of revenue expenditure include: 1. They are just necessary to keep the equipment running. Capital Expenditure is done towards any investment, which increases the earning capacity of a business. 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. For the purposes of demonstration, we’ll say that … Which one of the following is NOT true about revenue expenditure? 600+ SHARES. Text Solution. View All. Another way to prevent getting this page in the future is to use Privacy Pass. You may need to download version 2.0 now from the Chrome Web Store. One of the crucial elements of expenditure incurred by a company is revenue expenses or revenue expenditures. (3.) It may mean purchasing an asset for the business like the purchase of a plant, machinery, building, copyrights, etc. All of the following are examples of revenue expenditures: Routine repair/update costs on equipment. Answer: Option B The painting is held for public exhibition, education, or research in furtherance of public service, rather than financial gain. 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. 600+ VIEWS. Revenue expenditures is the item of expenditures which benefits may expire within an accounting period. a. The painting is scheduled to be sold immediately at auction. Deferred Revenue Expenditure Unlike capital expenditures, these are not carried forward to future years. 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. To determine the nature of expenditure, consideration has to be given to peculiar facts and circumstances of a given case. These costs don’t really add any value to the machine. The benefit of the revenue expenditures is received in the same accounting year itself. Expenses for repairs, renewals and replacement of permanent assets. The revenue expenditure consists … Which one of the following is NOT true about revenue expenditure? They improve the financial position of the business. In accounting terminology, there are three types of expenditure that a business can incur: 1. Salaries (unless they are incurred in construction of an asset such as a plant) 3. Bihar Schools … Loans advanced c. Subsidies d. Expenditure on acquisition of land. 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. Some machines need to be cleaned and lubricated regularly. Loans advancedc. An example graph showing Company A’s revenue expenditures for June 2019. Revenue Expenditures Revenue expenditures are short-term expenses used in the current period or typically within one year. View All. Subsidies. 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 … C. They reduce the profit of the concern. Which one of these is a revenue expenditure? Notice that t… C. Intangible assets These expenses are revenue in nature but the business derives benefits from these expenses for a period of more than one year. 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. Repairs and maintenance 2. Businesses use their revenues both to amass capital which can be used in the long term, and to cover immediate expenses. A. is taken into account through its effect on consumption. Which one of these is a revenue expenditure ? Bonuses 7. Raw Materials, Salaries, rent & taxes, postage etc. 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. Examples of Revenue Expenditures. However, there is also one more category of expenses, often referred to as Deferred Revenue Expenditure. Purchase of sharesb. Which of the following is a revenue expenditure? 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. Answer A. B. B. Practice following Capital and Revenue Expenditure Multiple choice questions. Meaning of Revenue Expenditure. Salaries and wages. During the normal course of business, any expenditure incurred of which benefit is received during the same accounting period is called revenue expenditure. Revenue Expenditure is that part of government expenditure that does not result in the creation of assets. Audit fee A) Item 1 is not one of the three criteria. Insurance. 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. 457,091 Subscribers. (2.) • The expenses vary from the … These are recurring in nature and are allocated to the profit and loss account of the same year. 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. Completing the CAPTCHA proves you are a human and gives you temporary access to the web property. These are the running expenses of the business. (1.) Advertising. Fixed assets. Latest Blog Post. These revenue expenditures are incurred mostly on sales promotion and advertising activities, and therefore, cannot be converted to cash. Which one of these is a revenue expenditure? 000+ LIKES. These expenditure will not increase the efficiency of the business. Overall, 70 per cent of school expenditure goes towards staff costs. An example of a revenue expenditure is an additional cost attached to a fixed asset like a piece of machinery. These expenses help a business sustain its operations and may not result in an increase in revenue. But the range is wider than that. Revenue expenditure refers to expenses incurred in the day to day running of the business. Marketing expenses 5. Revenue expenditures are often discussed in the context of fixed 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 … Expert Answer 100% (1 rating) Previous question Next question Get more help from Chegg. Purchase of shares Loans advanced Subsidies Expenditure on acquistion of land Answer : C Related Video. Revenue expenditures include things like maintenance, wages and salaries, and costs for utilities. Though the benefit of these expenses lasts for a number of years, these do not fall under the Capital expenditure. 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. Please enable Cookies and reload the page. A. Remember Multiple choice questions are having good weightage in the total marks of … Your IP: 211.14.175.49 Free Financial Statements Cheat Sheet. The long term assets that have no physical existence but are rights that have value is known as A. Staff training expenses 4. In the Keynesian model, tax revenue: A. does not appear in the aggregate expenditure function because it is always equal to government expenditure. Cost of goods sold. 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