Podcast
Questions and Answers
A significant expenditure on advertisement is typically categorized as what type of expenditure?
A significant expenditure on advertisement is typically categorized as what type of expenditure?
- Capital expenditure
- Revenue expenditure
- Deferred revenue expenditure (correct)
- None of the above
An advertising campaign launched to introduce a new product is generally classified as:
An advertising campaign launched to introduce a new product is generally classified as:
- Capital expenditure
- Revenue expenditure
- Deferred revenue expenditure (correct)
- None of the above
Where are capital receipts typically presented in financial statements?
Where are capital receipts typically presented in financial statements?
- Trading Account
- Profit & Loss Account
- Balance Sheet (correct)
- Manufacturing Account
Expenditures and receipts of a revenue nature are recorded in which of the following?
Expenditures and receipts of a revenue nature are recorded in which of the following?
Receiving money from selling a fixed asset is an example of what?
Receiving money from selling a fixed asset is an example of what?
Which of the following best describes the accounting treatment for a major overhaul of machinery that extends its useful life?
Which of the following best describes the accounting treatment for a major overhaul of machinery that extends its useful life?
A company spends $10,000 on advertising. $6,000 is expected to benefit the current accounting year, and $4,000 is expected to benefit the next. How should this be recorded?
A company spends $10,000 on advertising. $6,000 is expected to benefit the current accounting year, and $4,000 is expected to benefit the next. How should this be recorded?
A business purchases new computers for office use. How is this expenditure classified?
A business purchases new computers for office use. How is this expenditure classified?
Which of the following transactions would not typically result in a capital receipt?
Which of the following transactions would not typically result in a capital receipt?
A company undertakes extensive market research before launching a new product. This market research is expected to provide benefits over the next three years. How should the cost of market research be accounted for?
A company undertakes extensive market research before launching a new product. This market research is expected to provide benefits over the next three years. How should the cost of market research be accounted for?
Structural alterations that cost Rs. 25,000, increase the revenue earning capacity of an existing asset. How is this classified?
Structural alterations that cost Rs. 25,000, increase the revenue earning capacity of an existing asset. How is this classified?
Rs. 1,500 is spent on repairs before using a second hand car purchased for business use. How should this be classified?
Rs. 1,500 is spent on repairs before using a second hand car purchased for business use. How should this be classified?
To which account will the installation expenses for new machinery be posted?
To which account will the installation expenses for new machinery be posted?
Rs. 2,500 is spent on the overhauling of a second-hand machine upon purchase. What type of expenditure is this?
Rs. 2,500 is spent on the overhauling of a second-hand machine upon purchase. What type of expenditure is this?
A company spends Rs. 50,000 on advertising for a new product launch. It expects the benefits to last for four years. What type of expenditure is this most likely to be classified as?
A company spends Rs. 50,000 on advertising for a new product launch. It expects the benefits to last for four years. What type of expenditure is this most likely to be classified as?
Which of the following would NOT be considered a capital expenditure?
Which of the following would NOT be considered a capital expenditure?
A business replaces a component of a machine, extending its useful life by five years. The cost is Rs. 10,000. How should this expenditure be treated?
A business replaces a component of a machine, extending its useful life by five years. The cost is Rs. 10,000. How should this expenditure be treated?
A company purchases a new software license for Rs. 12,000, which is expected to be used for three years. What is the most appropriate accounting treatment for this cost?
A company purchases a new software license for Rs. 12,000, which is expected to be used for three years. What is the most appropriate accounting treatment for this cost?
Which scenario best describes a revenue expenditure?
Which scenario best describes a revenue expenditure?
If a company incorrectly classifies a revenue expenditure as a capital expenditure, what is the likely impact on the financial statements in the period of error?
If a company incorrectly classifies a revenue expenditure as a capital expenditure, what is the likely impact on the financial statements in the period of error?
Which financial statement typically includes details of capital receipts?
Which financial statement typically includes details of capital receipts?
The sale of fixed assets results in what type of receipt?
The sale of fixed assets results in what type of receipt?
Which of the receipts is classified as revenue receipt?
Which of the receipts is classified as revenue receipt?
Classify 'Sale of stock in trade'.
Classify 'Sale of stock in trade'.
An old machine's scrap value of Rs. 5,000 is categorized as:
An old machine's scrap value of Rs. 5,000 is categorized as:
How is the renewal fee for a patent typically classified in accounting?
How is the renewal fee for a patent typically classified in accounting?
Interest received on investments from UTI would be:
Interest received on investments from UTI would be:
What is the accounting treatment for money paid to MTNL for installing a telephone in the office?
What is the accounting treatment for money paid to MTNL for installing a telephone in the office?
When goods are purchased specifically for resale, how is the cost of these goods generally classified?
When goods are purchased specifically for resale, how is the cost of these goods generally classified?
How would you classify money paid for repairs that maintain an asset's existing condition?
How would you classify money paid for repairs that maintain an asset's existing condition?
What type of expenditure is depreciation on a fixed asset considered?
What type of expenditure is depreciation on a fixed asset considered?
How should heavy advertisement expenditure, intended to benefit several future periods, typically be treated?
How should heavy advertisement expenditure, intended to benefit several future periods, typically be treated?
If a business secures a loan to purchase new equipment, which type of receipt accurately describes the loan?
If a business secures a loan to purchase new equipment, which type of receipt accurately describes the loan?
A company invests in upgrading its existing machinery to enhance production capacity; how is this expenditure classified?
A company invests in upgrading its existing machinery to enhance production capacity; how is this expenditure classified?
Which of the following factors is LEAST likely to influence the classification of an expenditure as capital versus revenue?
Which of the following factors is LEAST likely to influence the classification of an expenditure as capital versus revenue?
A company spends $50,000 to repair a machine, restoring it to its original condition after a breakdown. It also spends $150,000 on upgrades that increase the machine's output by 30%. How should these costs be classified?
A company spends $50,000 to repair a machine, restoring it to its original condition after a breakdown. It also spends $150,000 on upgrades that increase the machine's output by 30%. How should these costs be classified?
A retail company incurred significant costs in redesigning its store layout to improve customer flow and increase sales. This redesign is expected to enhance the store's appeal for the next five years. How should the costs associated with the store redesign be classified?
A retail company incurred significant costs in redesigning its store layout to improve customer flow and increase sales. This redesign is expected to enhance the store's appeal for the next five years. How should the costs associated with the store redesign be classified?
A company purchases land with the intention of constructing a new factory in two years. In the meantime, the land is used as a parking lot. How should the expenses related to maintaining the parking lot (e.g., lighting, security) be classified during these two years?
A company purchases land with the intention of constructing a new factory in two years. In the meantime, the land is used as a parking lot. How should the expenses related to maintaining the parking lot (e.g., lighting, security) be classified during these two years?
एक व्यापारी के कमघचारी द्वारा गबन कर ली गयी रकम को आप क्या कहेंगे?
एक व्यापारी के कमघचारी द्वारा गबन कर ली गयी रकम को आप क्या कहेंगे?
सत्ता की अवधारणा के अनुसार, किसका अस्तित्व व्यापार से अलग माना जाता है?
सत्ता की अवधारणा के अनुसार, किसका अस्तित्व व्यापार से अलग माना जाता है?
दोहरा लेखा अवधारणा किस देश से उत्पन्न हुई मानी जाती है?
दोहरा लेखा अवधारणा किस देश से उत्पन्न हुई मानी जाती है?
दोहरा लेखा अवधारणा के प्रवर्तक/जनक कौन माने जाते हैं?
दोहरा लेखा अवधारणा के प्रवर्तक/जनक कौन माने जाते हैं?
दोहरा लेखा अवधारणा का विकास किस शताब्दी में हुआ?
दोहरा लेखा अवधारणा का विकास किस शताब्दी में हुआ?
लेखांकन में 'समान Dr. तथा समान Cr.' का नियम किस अवधारणा पर आधारित है?
लेखांकन में 'समान Dr. तथा समान Cr.' का नियम किस अवधारणा पर आधारित है?
आहरणों पर ब्याज लगाने का कारण क्या होता है, जिसके लिए कौनसा अवधारणा जिम्मेदार है?
आहरणों पर ब्याज लगाने का कारण क्या होता है, जिसके लिए कौनसा अवधारणा जिम्मेदार है?
यदि कोई व्यापारी अपने निजी खर्चों के लिए व्यापार से पैसे निकालता है, तो लेखांकन पुस्तकों में इसे क्या माना जाएगा?
यदि कोई व्यापारी अपने निजी खर्चों के लिए व्यापार से पैसे निकालता है, तो लेखांकन पुस्तकों में इसे क्या माना जाएगा?
लेखांकन में किस अवधारणा के अनुसार, स्वामी और व्यापार की लेखा पुस्तकें अलग-अलग होती हैं?
लेखांकन में किस अवधारणा के अनुसार, स्वामी और व्यापार की लेखा पुस्तकें अलग-अलग होती हैं?
लेखांकन में संपत्ति, दायित्व, खर्चे और आय किसके अनुसार अलग-अलग माने जाते हैं?
लेखांकन में संपत्ति, दायित्व, खर्चे और आय किसके अनुसार अलग-अलग माने जाते हैं?
Which accounting concept justifies the practice of converting paise into rupees in financial records?
Which accounting concept justifies the practice of converting paise into rupees in financial records?
Under which accounting concept would a business record the purchase of a calculator as a stationery expense, rather than capitalizing it as an asset?
Under which accounting concept would a business record the purchase of a calculator as a stationery expense, rather than capitalizing it as an asset?
A company chooses to record minor expenses in a sundry expense account instead of creating individual accounts for each. Which accounting principle best supports this practice?
A company chooses to record minor expenses in a sundry expense account instead of creating individual accounts for each. Which accounting principle best supports this practice?
The adjustment of outstanding, prepaid, accrued, and unearned income in the balance sheet is primarily based on which accounting concept?
The adjustment of outstanding, prepaid, accrued, and unearned income in the balance sheet is primarily based on which accounting concept?
Which concept assumes that a business will continue to operate indefinitely and is not likely to liquidate in the near future?
Which concept assumes that a business will continue to operate indefinitely and is not likely to liquidate in the near future?
A business records its fixed assets at their historical cost in the balance sheet, even if their market value has changed significantly. Which principle justifies this practice?
A business records its fixed assets at their historical cost in the balance sheet, even if their market value has changed significantly. Which principle justifies this practice?
Which accounting concept dictates that only transactions and events that can be measured in monetary terms are recognized in the financial statements?
Which accounting concept dictates that only transactions and events that can be measured in monetary terms are recognized in the financial statements?
A US-based company preparing its financial statements in US dollars is adhering to which accounting concept?
A US-based company preparing its financial statements in US dollars is adhering to which accounting concept?
Which concept is most directly violated if a company does NOT disclose significant lawsuits it is currently facing in its financial statement notes?
Which concept is most directly violated if a company does NOT disclose significant lawsuits it is currently facing in its financial statement notes?
A company consistently applies the same accounting methods from one period to the next. While not explicitly mentioned, this practice is essential for which broader goal of accounting information?
A company consistently applies the same accounting methods from one period to the next. While not explicitly mentioned, this practice is essential for which broader goal of accounting information?
Flashcards
Capital expenditure
Capital expenditure
Expenditure that increases the asset's earning capacity.
Repairs on Used Asset
Repairs on Used Asset
Expenses incurred to make a second-hand asset ready for use.
Installation expenses
Installation expenses
Costs to set up a new machine for operation.
Overhauling cost
Overhauling cost
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Revenue Expenditure
Revenue Expenditure
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Patent Renewal Fee
Patent Renewal Fee
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Cost of Goods Purchased for Resale
Cost of Goods Purchased for Resale
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Depreciation
Depreciation
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Deferred Revenue Expenditure
Deferred Revenue Expenditure
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Heavy Advertisement Expenditure
Heavy Advertisement Expenditure
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Advertisement Expenditure
Advertisement Expenditure
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Advertising Campaign (New Product):
Advertising Campaign (New Product):
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Capital Receipts
Capital Receipts
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Revenue Nature Expenditures and Receipts
Revenue Nature Expenditures and Receipts
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Sale of Fixed Asset
Sale of Fixed Asset
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Capital Expenditure (Accounting)
Capital Expenditure (Accounting)
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Revenue Expenditure (Accounting)
Revenue Expenditure (Accounting)
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Embezzled Funds
Embezzled Funds
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Business Entity Concept
Business Entity Concept
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Separate Entity
Separate Entity
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Dual Aspect Concept
Dual Aspect Concept
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Equal Dr. and Cr.
Equal Dr. and Cr.
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Drawings
Drawings
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Double Entry
Double Entry
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Italy
Italy
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Equal debit and credit
Equal debit and credit
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Revenue Receipt
Revenue Receipt
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Capital receipts in income statement
Capital receipts in income statement
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Sale of fixed assets as revenue
Sale of fixed assets as revenue
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Sale of stock in trade is a capital receipt
Sale of stock in trade is a capital receipt
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Scrap Value
Scrap Value
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Scrap Value as a revenue receipt
Scrap Value as a revenue receipt
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Interest on investments received from UTI
Interest on investments received from UTI
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Cost Paid to MTNL for telephone instalation
Cost Paid to MTNL for telephone instalation
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Full Disclosure Concept
Full Disclosure Concept
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Asset Classification
Asset Classification
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Liability Classification
Liability Classification
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Accrual Adjustments
Accrual Adjustments
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Going Concern Concept
Going Concern Concept
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Money Measurement Concept
Money Measurement Concept
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Currency Consistency
Currency Consistency
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Sundry Expenses
Sundry Expenses
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Historical Cost Principle
Historical Cost Principle
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Asset Valuation
Asset Valuation
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Study Notes
- These study notes cover accounting concepts and principles.
Business Entity Concept
- This concept asserts that the owner's existence is separate from the business.
- Separate accounting books are maintained for both the owner and the business.
- Assets, liabilities, expenses, and income are treated distinctly for each.
Dual Aspect Concept
- Originates from Italy and was developed by Lucas Pacioli in the 15th century.
- It establishes that every transaction has equal debit and credit entries.
Full Disclosure Concept
- Involves fully revealing all relevant information in financial statements.
- पैसों को पणाांक में बदलना is converting amounts into whole numbers.
- Calculator purchases are shown as stationery or business expenses.
- Small expenses are grouped under a sundry expense account instead of creating individual accounts.
Going Concern Concept
- Assumes that a business will continue operating indefinitely without interruption.
- States there's no expectation of the business ending in the near future.
- This allows businesses to show fixed assets at historical cost on the balance sheet.
Money Measurement Concept
- Only monetary transactions are recorded in accounting.
- Non-monetary transactions are excluded.
- The currency used should be that of the country where the financial statements are prepared.
Balance Sheet Items
- Assets are divided into Fixed Assets and Current Assets.
- Obligations (liabilities) are categorized as Long-term and Short-term.
- Adjustments for outstanding, prepaid, accrued, and unearned income are included in the Balance Sheet due to the Full Disclosure Concept.
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