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Questions and Answers
Which of the following best describes revenue expenditure?
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?
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?
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?
Which type of items are considered as revenue expenditure?
Expenditure for day-to-day conduct of the business is an example of revenue expenditure
Expenditure for day-to-day conduct of the business is an example of revenue expenditure
Revenue expenditure only influences the profit earning capacity of the business temporarily
Revenue expenditure only influences the profit earning capacity of the business temporarily
Expenditure on consumable items, goods, and services for resale can be recognized as capital expenditure
Expenditure on consumable items, goods, and services for resale can be recognized as capital expenditure
Revenue items such as stock and stationery may still be in hand at the end of the year
Revenue items such as stock and stationery may still be in hand at the end of the year
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.
