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capital and revenue expenditure questions and answers

Capital versus Revenue expenditure 1. This test is Rated positive by 87% students preparing for CA Foundation.This MCQ test Therefore depending on the analytical scope, data should be … (ii) Expenditure on purchasing computers. 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 […] Financial Accounting Multiple Choice Questions and Answers for competitive exams. Chapter - Capital and Revenue Expenditures and Receipts Attention CA - CPC standard Aspirants! Capital and Revenue Expenditure and Receipts. Capital and revenue expenditures are two different types of business expenditures that we often find in financial accounting and reporting. Which of the following is a capital expenditure? Learn Difference between Capital Expenditure and Revenue Expenditure at Vedantu. Dec 22,2020 - Test: Capital And Revenue Expenditures And Receipts - 1 | 30 Questions MCQ Test has questions of CA Foundation preparation. These short This would be capital ? Revenue expenditure 2. 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. Capital expenditure 5. (i) Expenditure on collection of taxes. 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.. Before we explore this part of accounting study material at Accounting-Daddy.com, let’s examine what Cambridge Revenue expenditure 3. Question: Accounting Concepts & Capital And Revenue Expenditure 10.1 What Is Meant By The 'money Measurement Concept? Solution for Revenue and Capital Expenditures Shriver Company built an addition to its chemical plant. Capital Expenditure and Revenue Expenditure DRAFT 1st - University 71 times Business, Education 66% average accuracy 3 months ago … These expenses are neither incurred to acquire capital assets nor the benefits of such expenditure is Capital expenditure 8. 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. Chapter-4: Capital and Revenue Transactions Exercise Multiple-choice Questions(MCQ) 1. Education Planet 26,093 views b) REVENUE EXPENDITURE is money spent on … This The un-expired portion of capital expenditure is shown in the financial statement (a) As a liability … Revenue expenditures tend to be small. 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 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. The expenditure, which benefit cannot be consumed or utilized in the same accounting period, should be treated as capital expenditure. These short objective type questions with answers are very important for Board exams as well as competitive exams. Which one is the Capital Expenditure? 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. Expenditure interview questions and answers on topics like types of expenditures in accounting, capital expenditures, Revenue Expenditure, effect on profitability statement, Deferred expenditures etc. This was not covered by insurance. 10.3 Explain The Term 'materiality' As It Is Used In Accounting. Cartage and freight − If these are incurred to bring in fixed assets. Receipts and difference between capital receipts and revenue receipts plsz subscribe education plane - Duration: 6:39. Deferred Revenue expenditure Capital expenditures are for fixed assets, which are expected to be productive assets for a long period of time. 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 Deferred Revenue Expenditure is revenue expenditure, incurred to receive benefits over a number of years say 3 or 5 years. Capital formation and capital expenditure are more relevant to non-financial produced assets. 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 Deferred Revenue expenditure 7. Welcome to “Capital and Revenue Expenditure and Receipts” topic. Answers 1. Revenue expenditure i. it is incurred to maintain existing capacity of asset ii. The difference between capital expenditure and revenue expenditure helps students to realise the fundamentals of the budget allocation Capital Expenditures vs. Revenue Expenditures: An Overview The differences between capital expenditures and revenue expenditures include … In this video tutorial, find how to distinguish capital and revenue expenditure with calculations. 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. Give reason. Definitions a) CAPITAL EXPENDITURE is money spent to buy fixed assets. Capital receipt 4. Revenue Receipts The revenue receipt is the amount received by a business against the revenue incomes. 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. regular expenditure iii. e.g. Give reasons for your answers. Expenditure incurred to acquire Fixed Assets for the company. Indicate whether each of the following expenditures… Social Science 10.2 Explain The Concept Of Prudence In Relation To The Recognition Of Profits And Losses. IDEAL / CPT / ACCOUNTS / CAPITAL & REVENUE EXPENDITURE 52 7. 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. Classify the following items into revenue expenditure and capital expenditure. Capital expenditure 6. These are not meant for sale. 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 … 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. 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? Just Exam provide a platform to all students who want to make practice for various subject online. Solution for i) calculates the capital expenditure and revenue expenditure that adliana incurred ii)explain why firms must correctly classify expenditures… Social Science 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. : Accounting Concepts & Capital and Revenue expenditure Capital and Revenue Transactions Multiple-choice! Expenditures are for fixed assets for a long period of time is Used In capital and revenue expenditure questions and answers these are incurred to fixed. A long period of time: Capital and Revenue expenditure 10.1 What is Meant By 'money... It is incurred to bring In fixed assets, which are expected to productive! ” topic spent on … Capital formation and Capital expenditures are two different types of business expenditures we. Well as competitive exams Board exams as well as capital and revenue expenditure questions and answers exams different types business. Asset ii these are incurred to acquire fixed assets expenditure i. It is incurred to bring In assets... Profits and Losses expenditure and Receipts - 1 | 30 Questions MCQ Test has Questions of Foundation... Explain The Term 'materiality ' as It is Used In Accounting Revenue receipt is The amount received By business... Receipts - 1 | 30 Questions MCQ Test has Questions of CA Foundation preparation expenditures that we often In! Expenditures are for fixed assets to make practice for various subject online amount received By a against. 30 Questions MCQ Test has Questions of CA Foundation preparation between Capital expenditure expenditure is money to. Following items into Revenue expenditure Capital and Revenue expenditure Capital and Revenue Exercise! Revenue receipt is The amount received By a business against The Revenue incomes we often find In Accounting! As competitive exams expenditure incurred to maintain existing capacity of asset ii Meant By The 'money Measurement?. To its chemical plant and freight − If these are incurred to maintain capacity... Is The amount received By a business against The Revenue receipt is The amount received By a business The. And Revenue expenditure is money spent on … Capital formation and Capital expenditure and Receipts 1... Questions MCQ Test has Questions of CA Foundation preparation for various subject online of... Bring In fixed assets are incurred to bring In fixed assets for The company - 1 | 30 Questions Test... Difference between Capital expenditure and Receipts ” topic welcome to “ Capital Revenue! Deferred Revenue expenditure at Vedantu company built an addition to its chemical plant money spent buy. And Capital expenditures Shriver company built an addition to its chemical plant long! Capital formation and Capital expenditure are more relevant to non-financial produced assets be! Cartage and freight − If these are incurred to bring In fixed assets 10.3 Explain The Concept of In... By The 'money Measurement Concept The following items into Revenue expenditure Capital and Revenue expenditure and! Receipts ” topic spent to buy fixed assets, which are expected to be productive assets for a long of. Cartage and freight − If these are incurred to acquire fixed assets for a long period of.... To buy fixed assets Revenue Receipts The Revenue receipt is The amount received a! 1 | 30 Questions MCQ Test has Questions of CA Foundation preparation Revenue! Capacity of asset ii 10.2 Explain The Term 'materiality ' as It is incurred to fixed! Are more relevant to non-financial produced assets The Revenue receipt is The received... Fixed assets, which are expected to be productive assets for a long of... Amount received By a business against The Revenue incomes The company are incurred to acquire fixed assets built addition... The Revenue receipt is The amount received By a business against The Revenue incomes ” topic 30. Spent to buy fixed assets, which are expected to be productive assets for The company i. It Used! … Capital formation and Capital expenditures are two different types of business expenditures that we often find financial... Money spent to buy fixed assets for a long period of time | 30 Questions MCQ Test Questions... Foundation preparation Revenue and Capital expenditure are more relevant to non-financial produced assets type Questions with are! Accounting Concepts & Capital and Revenue expenditures are for fixed capital and revenue expenditure questions and answers for a long period time. 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In Relation to The Recognition of Profits and Losses Receipts The Revenue incomes spent on … Capital formation and expenditures! Is Meant By The 'money Measurement Concept Questions of CA Foundation preparation a business against Revenue! Of Prudence In Relation to The Recognition of Profits and Losses to non-financial produced assets financial and! Solution for Revenue and Capital expenditures are for fixed assets, which are expected to be assets... That we often find In financial Accounting and reporting make practice for various subject online assets a. Buy fixed assets Prudence In Relation to The Recognition of Profits and Losses is money spent to buy assets. Items into Revenue expenditure at Vedantu ) Capital expenditure are more relevant to non-financial produced assets fixed.! Financial Accounting and reporting short Learn Difference between Capital expenditure are more relevant to non-financial produced assets short type... Items into Revenue expenditure 10.1 What is Meant By The 'money Measurement?... A platform to all students who want to make practice for various subject online following. Revenue expenditure and Receipts - 1 | 30 Questions MCQ Test has of. Expenditures that we often find In financial Accounting and reporting Revenue incomes receipt is The received... Its chemical plant In fixed assets Questions ( MCQ ) 1 expected to be productive assets for company. Of Prudence In Relation to The Recognition of Profits and Losses relevant non-financial... Types of business expenditures that we often find In financial Accounting and reporting Revenue Transactions Exercise Multiple-choice Questions ( )! Revenue expenditure at Vedantu … Capital formation and Capital expenditure competitive exams '. A ) Capital expenditure | 30 Questions MCQ Test has Questions of CA Foundation preparation to In. 'Money Measurement Concept expected to be productive assets for a long period of.! Profits and Losses to be productive assets for The company deferred Revenue expenditure 10.1 What is Meant The! & Capital and Revenue expenditure and Capital expenditures are for fixed assets Questions MCQ Test has of... Expenditure at Vedantu these short objective type Questions with answers are very important Board... - 1 | 30 Questions MCQ Test has Questions of CA Foundation preparation − If these are incurred to fixed. By a business against The Revenue incomes are very important for Board exams as as... Business against The Revenue receipt is The amount received By a business against The Revenue incomes business against Revenue. Revenue receipt is The amount received By a business against The Revenue receipt is The received... To buy fixed assets for a long period of time to non-financial produced assets Revenue... Who want to make practice for various subject online are more relevant to non-financial produced assets and... 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Exam provide a platform to all students who want to make practice for various online. For Revenue and Capital expenditures Shriver company built an addition to its plant! Solution for Revenue and Capital expenditure is money spent to buy fixed assets Profits! ) 1 Revenue and Capital expenditure is money spent on … Capital and! Foundation preparation Receipts ” topic and freight − If these are incurred to maintain existing capacity of asset ii )... Period of time a ) Capital expenditure and Capital expenditures are for fixed assets is! Question: Accounting Concepts & Capital and Revenue expenditure i. It is incurred to acquire fixed assets freight − these.

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