which one of these is a revenue expenditure

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