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Revenue Expenditure Quiz

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Questions and Answers

Which of the following best describes revenue expenditure?

Expenditure on research and development activities for future growth

Expenditure on long-term assets that enhance the earning capacity of the business

Expenditure on acquiring a new office building for the business

Expenditure for day-to-day conduct of the business, the benefits of which last less than one year (correct)

Which of the following is an example of revenue expenditure?

Purchase of a new office building

Acquisition of long-term machinery

Investment in research and development

Wages of workmen (correct)

What distinguishes revenue expenditure from capital expenditure?

Amount of money spent on the expenditure

The location where the expenditure is incurred

The type of industry in which the business operates

Duration of benefit derived from the expenditure (correct)

Which type of items are considered as revenue expenditure?

Consumable items and goods for resale within a year Signup and view all the answers

Expenditure for day-to-day conduct of the business is an example of revenue expenditure

True Signup and view all the answers

Revenue expenditure only influences the profit earning capacity of the business temporarily

True Signup and view all the answers

Expenditure on consumable items, goods, and services for resale can be recognized as capital expenditure

False Signup and view all the answers

Revenue items such as stock and stationery may still be in hand at the end of the year

True Signup and view all the answers

Study Notes

Revenue Expenditure

Revenue expenditure refers to the expenditure incurred for the day-to-day conduct of the business.
It is an expenditure that only influences the profit earning capacity of the business temporarily.
Examples of revenue expenditure include expenses on consumable items, goods, and services for resale.
Revenue items such as stock and stationery may still be in hand at the end of the year.
Revenue expenditure is distinguished from capital expenditure in that it does not have a long-term impact on the business.
It is expenditure that is used up or exhausted in a single accounting period, and its benefits are also received in the same period.

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Description

Test your knowledge on revenue expenditure with this quiz. Explore the concept of day-to-day business expenses and their impact on the profit earning capacity.