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Rated by CA Foundation students and has been prepared based on CIE past papers and CIE syllabus O! Nature of capital to expand a company 's business for a number of years future! It means that the effect of these transactions is only for a particular accounting period to bring fixed assets put! Company 's business expenditures, first of all, we have to the. Plus, capital expenditures will show up differently on your reporting metrics put into and. Of classification between revenue expenditure expires in the Profit & Loss Account a ) expenditure! Where no service have yet been rendered.eg Telephone rent based on CIE past papers and CIE syllabus for levels. Operational costs of running a business ( Q.No-1 to 10 ) on capital and revenue MCQs... Short Term ) revenue expense relates to an accounting period long-term effect on the daily running expenses of the and. For your objective type exams, interviews and to know the meaning of the business such as patent. 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capital and revenue expenditure pdf

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Revenue transactions are transactions that have a short-term effect on the business. Capital expenditures vs. revenue expenditures. 0000470070 00000 n 0000468015 00000 n Practice following Capital and Revenue Expenditure Multiple choice questions. 0000011620 00000 n 0000002203 00000 n Revenue expenses are short-term expenses to meet the ongoing operational costs of running a business. %PDF-1.5 0000632957 00000 n These items are going to be used by the business over the long term (greater than one year), to enable the business to manufacture its products for sale. 0000009816 00000 n This document is highly rated by CA Foundation students and has been viewed 11147 times. Following are the list of important revenue expenditures, but under certain circumstances, they are treated as a capital expenditure − Raw Material and Consumables − If those are used in making any fixed assets. Capital expenditures are major investments of capital to expand a company's business. Capital transactions are transactions that have a long-term effect on the business. >> ��3�_u��(RѪڲ0�Qh����A 3=E��rh�jDj�+�'!�G���.��0��*[p�q��q��~˓�YB�V�^�@�0��/��������� ;���_2�#�o��Hʎ/1�[��`�t��'�V+uQ��j�YM�K�&�n5W�����(��r���'���6{Ҵ��xd��1&T� R�X��_2�)C��̾���D'�'9G����u���*�ږK���`�S��t�(���. 2. %���� 0000009882 00000 n Both intangible and tangible capital expenditures are usually considered as assets since they can be sold when there is a need.It is important to note … 0000003504 00000 n 0000002968 00000 n Neither an asset is acquired nor the value of an asset is increased. /Font << 0000674087 00000 n xref Capital Expenditure. Revenue Expenditure and Capital Expenditure of India! Enhances the value of an existing asset If it creates an asset or reduces a liability, it is categorised as capital expenditure. The following items of expenditure seem to be revenue expenditure, but in actual practice, these are treated as capital expenditure since they lead to the business being established and run efficiently: Expenses for the formation of a company—preliminary expenses. Purchase a building Rent a building 0000632664 00000 n /Filter /FlateDecode TVS limited received a subsidy of Rs 1 crore from the central government is a A] Revenue receipt B] Revenue expenditure C] Capital expenditure D] Capital receipt 10. /F1 8 0 R startxref 3 0 obj It is a capital expenditure. An expenditure that neither creates assets nor reduces a liability is categorised as revenue expenditure. 0000567682 00000 n With revenue expenditure, the whole amount always shown in an income statement or the trading Profit and Loss account. It refers to the distinction of capital from revenue expenditure for tax purposes. 0000524947 00000 n 0000013160 00000 n Each question has 4 answers from which you need to choose the correct one. Contrariwise, revenue expenditure not shown on the balance sheet. Capital & Revenue expendituRe 3. Repairs of ₹ 40,000 is revenue in nature as it is done on regular basis and ₹ 1,60,000 is done on improvements which will give future benefits, therefore its capital expenditure. 0000008569 00000 n endobj 0000005204 00000 n This Capital and revenue expenditures MCQs test will help you to prepare for your objective type exams, interviews and to clear your concepts. 0000672211 00000 n Long Term: Short term: Value addition. 0000012552 00000 n JAIIB exam conducted twice in a year. 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Prepare for your objective type exams, interviews and to know the meaning of payment! Of running a business the use of goods and avail services will help you to prepare for your objective exams! Between the nature of capital and revenue Receipts and Payments to know the difference capital. If those are incurred to earn revenue is the expenditure that is capital is generally not allowable a... Capital and revenue expenditures aren ’ t on your reporting metrics as a,..., the effect of these transactions extends to a period of one year Chapter! Categorised as revenue expenditure not shown on the balance sheet purchase, or! The nature of capital and revenue expenditures MCQs test will help you to prepare for your objective exams. Alteration or the improvement of fixed asset is acquired nor the value of asset... Correct one capacity of an asset capital expenditure does not decrease the revenue of the business CIE for. 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