which one of these is a revenue expenditure

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

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