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Overall, 70 per cent of school expenditure goes towards staff costs. Capital Expenditure is done towards any investment, which increases the earning capacity of a business. The benefit of the revenue expenditures is received in the same accounting year itself. Subsidies. These are mainly day to day expenses of the business which are essential to keep the operations of the business going. Expenditure on acquisition of land, Expenditure by the government which does not create any assets for the government and does not reduce the liability of the government is called revenue expenditure. These costs don’t really add any value to the machine. Purchase of sharesb. Free Financial Statements Cheat Sheet. You may need to download version 2.0 now from the Chrome Web Store. Current assets. Answer A. Remember Multiple choice questions are having good weightage in the total marks of … Audit fee Introduction to Revenue Expenditure. a. They improve the financial position of the business. Revenue expenditure is taken into account while computing taxable profits and would be eligible for a tax deduction whereas on capital expenditure only depreciation can be claimed. View All. Capital Expenditure 2. Revenue expenditure refers to those expenditures which are incurred during normal business operation by the company, benefit of which will be received in the same period and the example of which includes rent expenses, utility expenses, salary expenses, insurance expenses, commission expenses, manufacturing expenses, legal expenses, postage and printing expenses, etc. Revenue expenditure refers to expenses incurred in the day to day running of the business. Theoretically, there are multiple points in time at which revenue could be recognized by companies.in accounting, revenue is recorded when the benefits and risks of ownership have transferred from seller to buyer, or when the delivery of services has been completed. The expenses vary from the … 600+ SHARES. Your IP: 211.14.175.49 • These expenditure will not increase the efficiency of the business. 457,091 Subscribers. You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments.. These are the running expenses of the business. Subsidies is an example of revenue expenditure because revenue expenditure refers to the estimated expenditure in a fiscal year which does not create assets for the government or cause reduction in liabilities for the government. Repairs and maintenance 2. Revenue expenditures are the extra expenses incurred by a company because any of its asset, but they do not increase the useful life of such asset or it productivity or add any kind of additional value to that asset. A revenue expenditure is an amount that is spent for an expense that will be matched immediately with the revenues reported on the current period's income statement. In accounting terminology, there are three types of expenditure that a business can incur: 1. Expenses for repairs, renewals and replacement of permanent assets. However, there is also one more category of expenses, often referred to as Deferred Revenue Expenditure. Which one of these is a revenue expenditure ? Revenue expenditures; Capital expenditures Definition and explanation of capital expenditures: An expenditure is a capital expenditure if the benefit of the expenditure extends to several trading years. Loans advancedc. Revenue expenditures is the item of expenditures which benefits may expire within an accounting period. Fixed assets. One of the crucial elements of expenditure incurred by a company is revenue expenses or revenue expenditures. (2.) Delivery and distribution expenses 6. Typical examples of revenue expenditure include: 1. Deferred Revenue Expenditure Which one of the following is NOT true about revenue expenditure? To determine the nature of expenditure, consideration has to be given to peculiar facts and circumstances of a given case. They are just necessary to keep the equipment running. A) These are the running expenses of the business ... A revenue expenditure is a cost that is charged to expense as soon as the cost is incurred. These expenses are revenue in nature but the business derives benefits from these expenses for a period of more than one year. This is so because repair and maintenance costs do not increase the earning capacity of the machine but only maintains it (i.e. By doing so, a business is using the matching principle to link the expense incurred to revenues generated in the same accounting period. 600+ VIEWS. The long term assets that have no physical existence but are rights that have value is known as A. Subsidiesd. Expert Answer 100% (1 rating) Previous question Next question Get more help from Chegg. Meaning of Revenue Expenditure. The revenue expenditures take place after a fixed asset had been put into … In the Keynesian model, tax revenue: A. does not appear in the aggregate expenditure function because it is always equal to government expenditure. There are certain factors on the basis of which expenditure is considered as Revenue Expenditure, given as under: Nature of Business : When a company trades in computer systems and its parts, it is considered as inventory for that firm and the cost of buying such inventory is … Though the benefit of these expenses lasts for a number of years, these do not fall under the Capital expenditure. Which of the following is not one of the three criteria? Revenue expenditures afford businesses immediate returns. A further £894 – or 15 per cent – was spent on education support staff including teaching assistants. Please enable Cookies and reload the page. If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware. (1.) Practice following Capital and Revenue Expenditure Multiple choice questions. This Capital and revenue expenditures MCQs test will help you to prepare for your objective type exams, interviews and to clear your concepts. Each question has 4 answers from which you need to choose the correct one. Loans advanced c. Subsidies d. Expenditure on acquisition of land. It is sometimes said that businesses have to spend money to make money. Purchase of shares b. These are recurring in nature and are allocated to the profit and loss account of the same year. Smaller-scale software initiative or subscription. Examples of revenue expenditures include the amounts spent on repairs and maintenance, selling, general and administrative expenses. B. These revenue expenditures are incurred mostly on sales promotion and advertising activities, and therefore, cannot be converted to cash. are the some example of revenue expenditure. E. is determined by the level of tax revenue. Businesses use their revenues both to amass capital which can be used in the long term, and to cover immediate expenses. Cost of goods for resale. a. Revenue Expenditures Revenue expenditures are short-term expenses used in the current period or typically within one year. Salaries and wages. The revenue expenditure consists … Cost of goods sold. Expenditure by the government which does not create any assets for the government and does not reduce the liability of the government is called revenue expenditure. Adding a loading and unloading dock to the company's warehouse C. Purchasing a microcomputer for the marketing department D. Replacing the battery in a company truck E. None of the abov. Revenue expenditures include the expenses required to … Revenue expenditures include things like maintenance, wages and salaries, and costs for utilities. Which one of the following is NOT true about revenue expenditure? (3.) Another way to prevent getting this page in the future is to use Privacy Pass. Whereas the initial purchase and installation costs would be classified as capital expenditure, any subsequent repair and maintenance charges incurred in the future will be classified as revenue expenditure. Performance & security by Cloudflare, Please complete the security check to access. D. They do not appear in the balance sheet. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place. A. is taken into account through its effect on consumption. Bonuses 7. The total expenditure, which comprises revenue and capital expenditure, shows an increase in quarter one of 2020 vis-à-vis quarter one in 2019 in … Purchase of shares Loans advanced Subsidies Expenditure on acquistion of land Answer : C Related Video. The painting is held for public exhibition, education, or research in furtherance of public service, rather than financial gain. Notice that t… Revenue expenditures include those expenses whose benefits are received by the business within the same accounting period as they are incurred. Completing the CAPTCHA proves you are a human and gives you temporary access to the web property. Revenue Expenditure is that part of government expenditure that does not result in the creation of assets. By far the biggest source of expenditure in schools is on teaching staff, accounting for almost half of all revenue expenditure at £2,811 per pupil in 2016-17. Rent on a property. If you need a refresher course on this topic take a look at our capital and revenue expenditure tutorial or our basics of bookkeeping tutorials for further information. Revenue Expenditure and 3. The painting is scheduled to be sold immediately at auction. • Which of the following is a revenue expenditure? B. 23. List of Revenue Expenditures – (Examples of Revenue Expenditures): The following is a list of the usual items of revenue expenditures: Expenses incurred for the ordinary administration and carrying on the business. The painting is protected, kept unencumbered, cared for, and preserved. Answer: Option B But the range is wider than that. If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. Marketing expenses 5. For the purposes of demonstration, we’ll say that … According to the revenue recognition principleRevenue Recognition PrincipleThe revenue recognition principle dictates the process and timing by which revenue is recorded and recognized as an item in a company's financial statements. 000+ LIKES. A) Item 1 is not one of the three criteria. Adding air conditioning to a company car B. C. They reduce the profit of the concern. These expenses help a business sustain its operations and may not result in an increase in revenue. An example of a revenue expenditure is an additional cost attached to a fixed asset like a piece of machinery. Bihar Schools … … This Multiple Choice Questions (MCQs) quiz for Chapter Capital and revenue expenditures consists of 15 questions. All of the following are examples of revenue expenditures: Routine repair/update costs on equipment. C. Intangible assets Cloudflare Ray ID: 609644c88ba7fcd5 B. reduces equilibrium income because it reduces autonomous spending. Unlike capital expenditures, these are not carried forward to future years. View All. Staff training expenses 4. Advertising. Examples of Revenue Expenditures. Raw Materials, Salaries, rent & taxes, postage etc. An example graph showing Company A’s revenue expenditures for June 2019. Hence, subsidies are treated as revenue expenditure as they do not reduce the liability of the government and do not add to the assets of the government, 2014-2015 (March) Foreign Set 3 (with solutions), 2014-2015 (March) Foreign Set 2 (with solutions), 2014-2015 (March) Foreign Set 1 (with solutions), CBSE Previous Year Question Paper With Solution for Class 12 Arts, CBSE Previous Year Question Paper With Solution for Class 12 Commerce, CBSE Previous Year Question Paper With Solution for Class 12 Science, CBSE Previous Year Question Paper With Solution for Class 10, Maharashtra State Board Previous Year Question Paper With Solution for Class 12 Arts, Maharashtra State Board Previous Year Question Paper With Solution for Class 12 Commerce, Maharashtra State Board Previous Year Question Paper With Solution for Class 12 Science, Maharashtra State Board Previous Year Question Paper With Solution for Class 10, CISCE ICSE / ISC Board Previous Year Question Paper With Solution for Class 12 Arts, CISCE ICSE / ISC Board Previous Year Question Paper With Solution for Class 12 Commerce, CISCE ICSE / ISC Board Previous Year Question Paper With Solution for Class 12 Science, CISCE ICSE / ISC Board Previous Year Question Paper With Solution for Class 10. It may mean purchasing an asset for the business like the purchase of a plant, machinery, building, copyrights, etc. Salaries (unless they are incurred in construction of an asset such as a plant) 3. Solution Show Solution. Revenue expenditure is expenditure which is incurred for the purpose of the trade of the business or in order to repair, enhance or maintain non-current assets. Insurance. Text Solution. A. Some machines need to be cleaned and lubricated regularly. Which one of these is a revenue expenditure? Which one of these is a revenue expenditure? Revenue expenditures are often discussed in the context of fixed assets. During the normal course of business, any expenditure incurred of which benefit is received during the same accounting period is called revenue expenditure. Latest Blog Post. General and administrative expenses an additional cost attached to a fixed asset a. They do not increase the efficiency of the same year also one more category of expenses often... 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