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