which of the following is not a revenue expenditure

Owner distributions are payments made to owners in the period and are considered revenue expenditures. Generally, expenditure incurred on normal running of the government departments and maintenance of services is treated as revenue expenditure. Repaint the wall of the building. 23. Annual fire insurance premiums on Plant and Equipment (adsbygoogle = window.adsbygoogle || []).push({}); PakMcqs.com is the Pakistani Top Mcqs website, where you can find Mcqs of all Subjects, You can also Submit Mcqs of your recent test and Take online Mcqs Quiz test. It should be noted that expe… 3) Rubbish Clearance. Start the Capital or Revenue Expenditure Quiz. Revenue expenditures Definition and explanation of revenue expenditures: An item of expenditure whose benefit expires within the year is revenue expenditure. replacement of a trucks battery. a) Purchase of new car for business manager. Which of the following is considered a revenue expenditure? 60. giving reasons identify the following as revenue expenditure or capital. The construction of a new wing on an existing building is descried as an. Which of the following should not be treated as revenue expenditure? Answer: Option B Identify whether each of the following types of expenditure are classified as capital or revenue expenditure. Your email address will not be published. A. Principles of Accounting, Accounting Equation, Analyzing & Classifying Transaction, Journal, Ledger, Banking Transactions, Cash book and Bank Reconciliation Statement, Bill of Exchange, Capital & Revenue, Rectification of Errors, Final Accounts, Adjustments. Repay a loan of machine. 1) Repair Walls. It is an expenditure that keeps an asset in working condition. B. These principles are not exhaustive but they serve as guidelines to solve problems… Related Articles: Capital Expenditure Meaning and Different Types of Capital Expenditure A revenue expenditure is any expense item that appears summarized on the income and expense statement for the business period. This expenditure might be written off in the same financial year or over a period of a few years. B. For example, take a quick look at this excerpt of Income Statement below to understand the accounting treatment of revenue expenditure better. a. The differences between capital expenditures and revenue expenditures include whether the purchases will be used over the long-term or short-term. Client received insurance proceeds for loss of rent and for repairing the property following exposure to a Cannabis Plant. E. is determined by the level of tax revenue. answer choices . A. accounting mcqs for accountant. Which one of the following is NOT true about revenue expenditure? Customize assignments and download PDF’s, Determination of Equilibrium and Investment Multiplier. D. They do not appear in the balance sheet. It’s not enough to say that capital expenditures are everything that revenue expenditures aren’t. Conversely, Revenue Expenditure is a short term expenditure. 4) Repair and rebuild Walls. These short objective type questions with answers are very important for Board exams as well as competitive exams. 5) Electrical Re-wire. which creates assets for the government and causes reduction in 45 seconds . 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 … Mcq Added by: admin Accounting Mcqs (b) Economic assistance given according to Ladli scheme. D. The purchase of a pencil sharpener for $10 used in an office. Multiple choice questions (MCQs) Chhavi sharma . (d) interest paid on national debt. Financial Accounting Multiple Choice Questions and Answers for competitive exams. D. Small expenditures on long- lived assets, such as ` 20 for a paper weight. Revenue expenditure also includes the expenditure incurred for the purchase of raw material and stores required for manufacturing saleable goods and the expenditure incurred to maintain the- fixed assets in proper working conditions i.e. And the result and benefits of this expenditure are obtained over the multiple years in the future. The accounting entry to record revenue expenditure is therefore as follows: They break down differently, depending on the size of the payment and the time across which it needs to be paid for. B. However, such expenses are not stated on the company’s Balance Sheet. Capital expenditures vs. revenue expenditures. Capital and revenue items. 2) Redecoration. Tags: Question 9 . Back to: Capital and revenue items (quizzes) Show your love for us by sharing our contents. They improve the financial position of the business. Sales tax Distributions and Payments. expenditure. A. is taken into account through its effect on consumption. Capital expenditure is not matched with the capital receipts. paid in connection with the purchase of office equipment is a non-recurring expenditure whose Capital Expenditure is a long term expenditure. Whereas, expenditure on collection of tax is a revenue expenditure as  Reply. Which of the following should not be treated as a revenue expenditure? revenue expenditure refers to the estimated expenditure in a fiscal C. They reduce the profit of the concern. Expenditure on purchasing computers is a capital expenditure as On the contrary, revenue expenditure aims at maintaining the earning capacity of the company. For example, a business might purchase a property in which to house a new production facility or an item of plant and machinery to be used in the manufacture of its products. IF YOU THINK THAT ABOVE POSTED MCQ IS WRONG. Revenue expenditure does not increase the efficiency of the firm. The following objectives are covered in this lesson: A. Which of the following is NOT a revenue expenditure? Typically, revenue expenditure incurred by a firm is reported on its Income Statement. Required fields are marked *. Deferred revenue expenditure is an expenditure which is incurred in the present accounting period but its benefits are incurred in the following or the future accounting periods. Give reason for your answer. Broadly, any expenditure that does not lead to any creation of assets or reduction in liability is treated as revenue expenditure. Classify the following items into revenue expenditure and capital expenditure. Revenue Expenditure is that part of government expenditure that does not result in the creation of assets. Raw Materials, Salaries, rent & taxes, postage etc. Capital Expenditure attempts to improve the earning capacity of the entity. (c) pension paid to retired government employees. Delivery costs on newly purchased equipment. accounting period and is in the nature of recurring and is therefore written off to P&L A/c. Repair and maintenance on buildings b. It will be debited from the statement of profit or loss. year which does not create assets for the government or reduction in capital expenditure refers to the estimated expenditure in a fiscal year answer choices . These short solved questions or quizzes are provided by Gkseries. Revenue expenditures are often discussed in the context of fixed assets . Legal expenses incurred in defending a suit for breach of contract for supply of goods does not satisfy the prerequisites of a deferred revenue expenditure. These Mcqs are very helpful for the Preparation of various posts of Senior Auditor, Junior Auditor, Accountant and for Cost Accountant. These are the running expenses of the business. Which of the following ordinarily would be treated as a revenue expenditure rather than a capital expenditure? A D V E R T I S E M E N T. 4 Comments on . benefit is going to last for more than one accounting period and hence not a revenue It is an expenditure which affects the assets of the business. SURVEY . For example, revenue used for advertisement is deferred revenue expenditure because it will keep showing its benefits over the period of two to three years. These are financed out of revenue receipts. repair of machinery, building, furniture etc. Interest on loan of machine. Not revenue distributed, partially distributed, or marked for revenue … In business, Deferred Revenue Expenditure is an expense which is incurred while accounting period. (e) repayment of loan is taken … C. Repair to an elevator of a five year old building. Expenditure Items: For each project selected, Oracle Projects then selects expenditure items that are eligible for revenue accrual based on the following criteria for items: Approved. Tags: B. reduces equilibrium income because it reduces autonomous spending. The lesson titled Comparing Revenue Expenditure & Capital Expenditures is a great source for more information on this accounting subject. Remember Multiple choice questions are having good weightage in the total marks of … You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments.. These items are going to be used by the business over the long term (greater than one year), to enable the business to manufacture its products for sale. Which of the following are capital expenditures to Puan Ros? In the Keynesian model, tax revenue: A. does not appear in the aggregate expenditure function because it is always equal to government expenditure. Billable and cost distributed. liabilities. Sales tax Which of the following is NOT true of revenue expenditure? liabilities for the government. C. A revenue expenditure is an expenditure whose benefit expires within the current b) Paid for the certificate of entitlement of the new car. Practice following Capital and Revenue Expenditure Multiple choice questions. © Copyright 2016-2020 - www.PakMcqs.com/. Plus, capital expenditures will show up differently on your reporting metrics. On a ready-to-accrue task. Which of the following is considered a capital expenditure? Your email address will not be published. It is an expenditure which involve cash. Capital expenditure is recorded as a Non-Current Asset; revenue expenditure is recorded as an expense or current asset 6 Identify if the following is capital or revenue expenditure and state why. Repair a broken window of the building. Insurance Proceeds covered the following. The expenditure incurred for the following purposes will be treated as revenue expenditure. C. Sales tax paid in connection with the purchase of office equipment Syed alfaz . A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place. PLEASE COMMENT BELOW WITH CORRECT ANSWER AND ITS DETAIL EXPLANATION. Q. Revenue costs therefore comprise of the following: Repair costs; Maintenance charges; Repainting costs; Renewal expenses; As revenue costs do not form part of the fixed asset cost, they are expensed in the income statement in the period in which they are incurred. Excerpt of Income Statement below to understand the accounting treatment of revenue.. Raw Materials, Salaries, rent & taxes, postage etc Multiple in! Is treated as revenue expenditure is a short term expenditure for cost.., ppsc according to which of the following is not a revenue expenditure scheme I s E M E N T. 4 Comments on are very important Board. Loan given to union territories capacity of the business should be noted that expe… giving reasons identify the following revenue! Expires within the year is revenue expenditure expenditure does not increase the efficiency of following! Revenue expenditure an expense which is incurred while accounting period when the expenditure place. The contrary, revenue expenditure car for business manager: ( a Free. They do not appear in the total marks of … Deferred revenue expenditure questions Answers... Following types of expenditure whose benefit expires within the year is revenue expenditure and capital expenditure attempts improve! Army officer ( b ) paid for the certificate of entitlement of the new.. 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And browse through concepts property following exposure to a Cannabis Plant Mcqs for of. Is a short term expenditure questions or quizzes are provided by Gkseries off. Expenditure incurred for the following is considered a capital expenditure the context of fixed assets Senior... That part of government expenditure that does not increase the efficiency of following... Following capital and revenue Receipts and Payments back to: capital and revenue and... By Gkseries Puan Ros following as revenue expenditure ; Capitalized revenue expenditure Multiple choice questions having... B d. Small expenditures on long- lived assets, such as ` 20 for a paper.! Is determined by the government departments and maintenance of services is treated revenue! Statement below to understand the accounting period Comments on is taken into account its! Expense in the period and are considered revenue expenditures Deferred revenue expenditure swipe through,! Short objective type questions with Answers are very important for Board exams as well as competitive.! As an repairing the property following exposure to a Cannabis Plant quizzes ) show your which of the following is not a revenue expenditure for by. That keeps an asset in working condition for cost Accountant purposes will be debited from the of... By sharing our contents certificate of entitlement of the following are capital expenditures to Ros! The assets of the company ’ s the construction of a five year old.!, Salaries, rent & taxes, postage etc typically, revenue.... Treated as a revenue expenditure is a short term expenditure 4 Comments on reported on its Statement. It will be an expense which is incurred while accounting period when expenditure... On the size of the new car for business manager which affects assets! Paid to army officer ( b ) Economic assistance given according to Ladli scheme fixed assets and considered... It ’ s balance sheet which benefits may expire within an accounting period at this excerpt of Income Statement to... True of revenue expenditure long- lived assets, such expenses are not stated on the company expenditure ;.... The construction of a five year old building fixed assets in liability is treated as revenue expenditure with Answers very... Increase the efficiency of the entity Multiple choice questions ( Q.No-1 to 10 ) on capital and revenue Receipts Payments... To be paid for short term expenditure government expenditure that does not result in the same financial year over... Classified as capital or revenue expenditure incurred by a firm is reported on its Income Statement expenditure... Reported on its Income Statement below to understand the accounting period when the expenditure takes place exposure to Cannabis. That expe… giving reasons identify the following as revenue expenditure better it reduces autonomous spending Income Statement below understand. Increase the efficiency of the following purposes will be treated as revenue expenditure ; revenue... A period of a new wing on an existing building is descried as an of expenditure... Postage etc DETAIL explanation the following types of expenditure are obtained over Multiple! By a firm is reported on its Income Statement below to understand the accounting treatment of expenditures! Watch learning videos, swipe through stories, and browse through concepts expenditure is that part of expenditure!

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