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capital and revenue expenditure questions and answers

Click hereto get an answer to your question ️ Short answer type questions:Is the following revenue expenditure or capital expenditure in the context of government budget? Definitions a) CAPITAL EXPENDITURE is money spent to buy fixed assets. Give reason. These are not meant for sale. Capital Expenditure and Revenue Expenditure A business incurs expenditure on two types of items: (i) routine items like stationery, postage, repairs, salaries, etc., where the benefit is available for a short period, and (ii) fixed assets like machinery, building, furniture, etc., whose benefit is available over a number of years. Education Planet 26,093 views Expenditure incurred to acquire Fixed Assets for the company. I assume all the above will be revenue expenditure The client also realised the whole of the ground floor need to be replaced due to damp and wood worm and paid 10K. Capital expenditures are for fixed assets, which are expected to be productive assets for a long period of time. Capital expenditure 8. regular expenditure iii. This Which of the following is a capital expenditure? Capital Expenditures vs. Revenue Expenditures: An Overview The differences between capital expenditures and revenue expenditures include … Deferred Revenue Expenditure is revenue expenditure, incurred to receive benefits over a number of years say 3 or 5 years. Capital Expenditure is an amount incurred for acquiring the long term assets such as land, building, equipments which are continually used for the purpose of earning revenue. 10.3 Explain The Term 'materiality' As It Is Used In Accounting. Capital receipt 4. However, from this blog post you can normally identify the Revenue and capital expenditure, and may be able to give proper treatment in the financial statement. Chapter-4: Capital and Revenue Transactions Exercise Multiple-choice Questions(MCQ) 1. In this video tutorial, find how to distinguish capital and revenue expenditure with calculations. Capital and revenue expenditures are two different types of business expenditures that we often find in financial accounting and reporting. Give reasons for your answers. This test is Rated positive by 87% students preparing for CA Foundation.This MCQ test A business expenditure is an outflow of economic resources (mostly in the form of cash and cash equivalents) as a result of undertaking various activities during the normal course of business and to further the […] These expenses are neither incurred to acquire capital assets nor the benefits of such expenditure is Revenue expenditures tend to be small. Solution for i) calculates the capital expenditure and revenue expenditure that adliana incurred ii)explain why firms must correctly classify expenditures… Social Science Capital Expenditure and Revenue Expenditure DRAFT 1st - University 71 times Business, Education 66% average accuracy 3 months ago … Revenue expenditure i. it is incurred to maintain existing capacity of asset ii. Solution for Revenue and Capital Expenditures Shriver Company built an addition to its chemical plant. These short objective type questions with answers are very important for Board exams as well as competitive exams. (ii) Expenditure on purchasing computers. Capital versus Revenue expenditure 1. Cartage and freight − If these are incurred to bring in fixed assets. The un-expired portion of capital expenditure is shown in the financial statement (a) As a liability … Which one is the Capital Expenditure? Indicate whether each of the following expenditures… Social Science Classify the following into Capital, Revenue and Deferred Revenue expenditure, stating reasons in each case: (a) A sum of ₹ 32,000 has been spent on a machine as follows: (i) ₹ 20,000 for addition to double the output, (ii) ₹ 5,000 for repairs necessitated by negligence and (iii) ₹ 7,000 for replacement of worn-out parts. Revenue expenditure 2. e.g. On the other hand, when capital expenditure consider as revenue expenditure, it will understate the profit of the company and the fixed assets may disappear from the list and can be theft. Before we explore this part of accounting study material at Accounting-Daddy.com, let’s examine what Cambridge Therefore depending on the analytical scope, data should be … Deferred Revenue expenditure Answers 1. The difference between capital expenditure and revenue expenditure helps students to realise the fundamentals of the budget allocation Dec 22,2020 - Test: Capital And Revenue Expenditures And Receipts - 1 | 30 Questions MCQ Test has questions of CA Foundation preparation. Chapter - Capital and Revenue Expenditures and Receipts Attention CA - CPC standard Aspirants! Capital & Revenue Expenditure 20 Questions | By Sweetsalman123 | Last updated: Jan 29, 2013 | Total Attempts: 1354 Questions All questions 5 questions 6 questions 7 questions 8 questions 9 questions 10 questions 11 questions 12 questions 13 questions 14 questions 15 questions 16 questions 17 questions 18 questions 19 questions 20 questions Expenditure interview questions and answers on topics like types of expenditures in accounting, capital expenditures, Revenue Expenditure, effect on profitability statement, Deferred expenditures etc. (i) Expenditure on collection of taxes. 10.2 Explain The Concept Of Prudence In Relation To The Recognition Of Profits And Losses. Following is a list of expenses which come under revenue expenditure but should be treated as capital expenditure − Raw material and consumables − If these are used in making any fixed assets. Capital and Revenue Expenditure and Receipts. Revenue expenditures are for costs that are related to specific revenue transactions or operating periods, such as the cost of goods sold or repairs and maintenance expense.. IDEAL / CPT / ACCOUNTS / CAPITAL & REVENUE EXPENDITURE 52 7. Capital expenditure 6. Revenue expenditure 3. In some cases an accounting department may choose to impose an internal threshold limit for revenue expenditure—anything above a certain price will be treated as a capital expenditure Learn Difference between Capital Expenditure and Revenue Expenditure at Vedantu. Just Exam provide a platform to all students who want to make practice for various subject online. Students can Download Accountancy Chapter 11 Capital and Revenue Transactions Questions and Answers, Notes Pdf, Samacheer Kalvi 11th Accountancy Book Solutions Guide Pdf helps you to revise the complete Tamilnadu State Board New … Classify the following items into revenue expenditure and capital expenditure. These short Deferred Revenue expenditure 7. Capital receipt are the amount received from the owner as capital, loan from outsiders and proceeds from the sale fixed assets whereas revenue receipts are the receipt or incomes that arise from day to day business activities. Financial Accounting Multiple Choice Questions and Answers for competitive exams. This was not covered by insurance. Welcome to “Capital and Revenue Expenditure and Receipts” topic. Revenue Receipts The revenue receipt is the amount received by a business against the revenue incomes. Capital expenditure 5. We need to show the Capital expenditure on the Assets side of the Balance Sheet while we show the Revenue expenditure on the debit side of the Trading and Profit and Loss Account. This would be capital ? Capital formation and capital expenditure are more relevant to non-financial produced assets. b) REVENUE EXPENDITURE is money spent on … The expenditure, which benefit cannot be consumed or utilized in the same accounting period, should be treated as capital expenditure. Question: Accounting Concepts & Capital And Revenue Expenditure 10.1 What Is Meant By The 'money Measurement Concept? Question: Classification Capital And Revenue Expenditures US Freight Lines Co Incurred The Following Costs Related To Trucks And Vans Used In Operating Its Delivery Service: Classify Each Of The Costs As A Capital Expenditure Or A Revenue Expenditure. Receipts and difference between capital receipts and revenue receipts plsz subscribe education plane - Duration: 6:39. Concept of Prudence In Relation to The Recognition of Profits and Losses types of business expenditures that we find. 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