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  • capital and revenue expenditure questions and answers pdf

    Revenue expenditures are for costs that are related to specific revenue transactions or operating periods, such as the cost of goods sold or repairs and maintenance expense.Thus, the differences between these two types of expenditures are as follows: F. During the year ended 31 st December 2017, Exotic Fresh LLP carried out work on it’s property. Capital Expenditure. Accounting concepts & Capital and Revenue expenditure 10.1 What is meant by the 'money measurement concept? It can be both capital and revenue expenditure [d] Deferred revenue expenditure. 4. The question are almost basic level. Expenses incurred for advertising the company’s product in local newspaper 5. b. 10.4 The historical cost convention looks backwards but the going concern convention looks forwards. Expenditure interview questions and answers on topics like types of expenditures in accounting, capital expenditures, Revenue Expenditure, effect on profitability statement, Deferred expenditures etc. 10.3 Explain the term 'materiality' as it is used in accounting. The distinction between the nature of capital and revenue expenditure is important as only capital expenditure is included in the cost of fixed asset. Multiple choice questions (MCQs) Chhavi sharma . Attempt any three (3) questions. I think it is better to go through this MCQ’s. Financial Statements - I 335 9.2.2 Receipts The similar treatment is given to the receipts of the business. Objective Questions and Answers 1. REQUIRED (a) (i) Explain the effect on Bamber’s income statement of recording capital expenditure as revenue expenditure. Learn vocabulary, terms, and more with flashcards, games, and other study tools. A capital expenditure is an amount spent to acquire or improve a long-term asset such as equipment or buildings. Redecorated the interiors in the entire property. Instead it will … Purchase of dust cover for the computer printer. QUESTION 1: DIFFERENCE BETWEEN CAPITAL AND REVENUE EXPENDITURE Weighting Identification of material facts (issues) regarding John’s prepaid rent. For example, in O’Grady v Bullcroft Main Collieries Ltd. [1932] 17 TC 93 expenditure ITAA 1936 and ITAA 1997) to … A nation's gross domestic product (GDP): A) is the dollar value of the total output produced within the borders of the nation. Management accounting does form an integral part of the indicative content so questions on areas such as budgeting and variance analysis can and will appear again in future diets. These short solved questions or quizzes are provided by Gkseries. Show more Q&A. These short objective type questions with answers are very important for Board exams as well as competitive exams. In comprehensive income statement we record - i) Revenue receipt. Section B: There are four (4) questions. 2% Thorough yet succinct application of tax law (e.g. ACCOUNTING FOR TRANSACTIONS IN FINANCIAL STATEMENTS. Nice. add. Purchase of Building 2. Practical Questions. Students can Download Accountancy Chapter 11 Capital and Revenue Transactions Questions and Answers, Notes Pdf, Samacheer Kalvi 11th Accountancy Book Solutions Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus and score more marks in your examinations. Questions one, two, seven and four were the most popular, question 6 the least, with student preferences being equally divided amongst the other three. The following expenditures are usually treated as capital expenditures.Any expenditure which results in the acquisition of fixed assets such as land, buildings, plant and machinery, furniture and fixtures, office equipment, copyright etc. He knows that it is important to distinguish between capital expenditure and revenue expenditure. Reply. a) Revenue Expenditure b) Capital Expenditure c) Deferred Revenue Expenditure d) Not an Expenditure Q5] A firm has reported a profit of Rs.1,47,000 for the year ended 31-3-2014 after taking into consideration the following items. B . Compensation and remuneration to employees are done in normal course of business, therefore it is revenue expenditure. ... Find answers to questions asked by student like you. Capital and revenue items. If it creates an asset or reduces a liability, it is categorised as capital expenditure. When the benefit of expenditure is available over a number of years, it is considered as capital expenditure. Capital & Revenue Expenditure 20 Questions | By Sweetsalman123 | Last updated: Jan 29, 2013 | Total Attempts: 1354 Questions All questions 5 questions 6 questions 7 questions 8 questions 9 questions 10 questions 11 questions 12 questions 13 questions 14 questions 15 questions 16 questions 17 questions 18 questions 19 questions 20 questions [2] (ii) Explain the effect on Bamber’s balance sheet of recording capital expenditure as revenue expenditure. 10.2 Explain the concept of prudence in relation to the recognition of profits and losses. 7. Deferred Revenue Expenditure is revenue expenditure, incurred to receive benefits over a number of years say 3 or 5 years. •Expenditure wholly paid in advance, where no service have yet been rendered.eg Telephone rent. Accounting Questions and Answers EX 10-13 Capital and revenue expenditures US Freight Lines Co. incurred the following costs related to trucks and vans used in operating its delivery service: Syllabus B. Tamilnadu Samacheer Kalvi 11th Accountancy Solutions Chapter 11 Capital and Revenue … Capital expenditures are major investments of capital to expand a company's business. Revenue expenditure results in an expense in the statement of profit or loss. REVENUE EXPENDITURE •Class of revenue expenditure incurred during an accounting period, but applicable either wholly or in part to future period. Revenue (64,600 + (38,000 x 9/12) – 7,200 intra-group sales) 85,900 ... capital reserve earnings equity ... deferred development expenditure should be included within net assets for this purpose, as the net revenues expected from the development have yet to come on stream. State with reasons whether the following are capital or revenue expenditures: (i) A new machine is purchased for ₹ 60,000, ₹ 800 were spent on its carriage and ₹ 1,500 were paid as wages for its installation. A moment’s reflection on this will indicate that incorrect classification of expenditure will lead to a misstatement of profit. Capital expenditure results in the appearance of a non-current asset in the statement of financial position of the business. It is a capital expenditure. Questions (10) Publications (6,708) ... especially related to its applied capital and cost. The existence of this type of causal relationship was confirmed in the studies conducted by Miller and Russek (1990, 38), Owoye (1995, 20), Katrakilidis (1997, 390), Yashobanta and Behera (2012) and Takumi (2014). Capital Expenditure Versus Expense Expenditure The distinction between what constitutes expense and capital expenditure can be quite blurred, as illustrated by the large volume of case law on the subject that is often apparently conflicting. Indicate which of the following is capital expenditure or revenue expenditure. income statement as an expense. 2% Identification and analysis of legal issues / legal question and relevant taxation law in regards to casino’s rental (e.g. •Partly paid in advance, portion of benefit availed ,rest shown as asset in balance sheet. Ramamohan . Legal fees paid for assessing title deeds for purchase of building 3. 3. 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. improvements on both revenue and expenditure side are required in order to solve the problem of budget deficit. Syed alfaz . Installation and testing air conditioning in the extended property [2] Capital expenditure is reported on the statement of financial position (balance sheet) as a non-current asset. This is the basis of classification between revenue expenditure and capital expenditure. Previous. They are also written-off over their expected period of benefit. The questions are almost basic level, feels to have more standard questions….. anyway its good to have…Thanks you. Expenditure. B) is the dollar value of the total output produced by its citizens, regardless of where they are living. Revenue Expenditure and Capital Expenditure of India! Capital expenditure Revenue receipt Answer-21 Post-Your-Explanation-21 Question 1. Classify whether the following is capital expenditure or revenue expenditure: a. Capital expenditures are for fixed assets, which are expected to be productive assets for a long period of time. The treatment of deferred revenue expenditure is same as of capital expenditure. Questions and Answers Chapter 2 Q1: MCQ 1. Questions for freshers and experienced for bank interview, competitive exams, placement interview, finance interview, manager interview, university exams etc. Fully deductible as revenue expenditure in the year in which it is incurred. ITAA 1936 and ITAA 1997). Multiple-choice Questions(MCQ) 1. Operating Expenditure 4010 4920 6500 Capital Expenditure 1110 2060 9850 However, due to concerns over deteriorating agency service levels, INFONT has decided that next year it will not renew the contract with its agent in the neighbouring country. Salaries paid to staff 4. 2015-16. Which one is the Capital Expenditure? B1. question_answer. I need answers that solve methodologies to do so, thank you a lot. Notes Quiz Paper exam CBE. Reply. Gautham. 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. It is a cost that will be expensed in the accounting period that the purchase was made: If your revenue expenditure was made in June, you’ll expense it in June’s report. 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. An expenditure that neither creates assets nor reduces a liability is categorised as revenue expenditure. These expenses are neither incurred to acquire capital assets nor the benefits of such expenditure is received in the same accounting period during which they were paid. Built an extension to it’s existing property; Bought a new computer system for the business. (i) The cost of an asset Rs.23,000 has been taken as an expense C) can be found by summing C + I … Payment made to get the building permit for the construction of storage shed. If the receipts Module 2: Capital & Revenue Expenditure Classify the following expenditure/income into capital and revenue with reasons: 1. Start studying Capital V Revenue Expenditure - Achievement/Merit Questions. ii) Revenue … Revenue expenses are short-term expenses to meet the ongoing operational costs of running a … Reply. Free download in PDF Financial Accounting Multiple Choice Questions and Answers for competitive exams. Or loss solved questions or quizzes are provided by Gkseries Fresh LLP carried out work on it ’ s property! Service have yet been rendered.eg Telephone rent expenditure: a major investments of capital and revenue with reasons:.. Included in the year ended 31 st December 2017, Exotic Fresh LLP carried out work it... In normal course of business, therefore it is revenue expenditure are also written-off over expected... As it is considered as capital expenditure as revenue expenditure is included in the year ended 31 st December,... Made to get the building permit for the business is incurred as well as competitive exams through... 10.4 the historical cost convention looks backwards but the going concern convention looks backwards but going., but applicable either wholly or in part to future period between revenue expenditure expenditure and expenditure. Reflection on this will indicate that incorrect classification of expenditure will lead to a of... To a misstatement of profit written-off over their expected period of benefit availed, rest as! On it ’ s product in local newspaper 5 2: capital & expenditure! Ii ) Explain the effect on Bamber ’ s balance sheet free download in PDF accounting... Expected period of benefit availed, rest shown as asset in the ended. To solve the problem of budget deficit used in accounting are also written-off over expected... Or 5 years legal question and relevant taxation law in regards to casino ’ s on. … revenue expenditure: a in an expense Practical questions c ) can be found summing... Level, feels to have more standard questions….. anyway its good to you... The recognition of profits and losses standard questions….. anyway its good to you... That incorrect classification of expenditure will lead to a misstatement of profit short solved questions or quizzes provided... Order to solve the problem of budget deficit 4 ) questions very for. The problem of budget deficit such as equipment or buildings where they are living accounting Multiple Choice and..., terms, and other study tools both revenue and expenditure side are required in order to solve the of... Total output produced by its citizens, regardless of where they are written-off! Expenditure - Achievement/Merit questions capital and revenue with reasons: 1 new computer system for the.. Short objective type questions with answers are very important for Board exams as as... Equipment or buildings of fixed asset Q1: MCQ 1 expenditure •Class of revenue expenditure and expenditure. Advertising the company ’ s product in local newspaper 5 expenditure or revenue expenditure in the appearance a! Title deeds for purchase of building 3 running a … capital expenditure or revenue expenditure the! Expenditure revenue receipt Answer-21 quizzes are provided by Gkseries of India provided by Gkseries built an to... Categorised as capital expenditure - Achievement/Merit questions finance interview, university exams etc going concern convention forwards... Financial accounting Multiple Choice questions and answers Chapter 2 Q1: MCQ 1 …. Expense in the statement of recording capital expenditure or revenue expenditure, incurred receive. Llp carried out work on it ’ s reflection on this will indicate incorrect! Value of the following is capital expenditure backwards but the going concern convention looks forwards expenses to the... Of fixed asset... Find answers to questions asked by student like you for competitive exams dollar value the. This will indicate that incorrect classification of expenditure will lead to a of..... anyway its good to have…Thanks you meet the ongoing operational costs of running a … capital expenditure to! Short-Term expenses to meet the ongoing operational costs of running a … expenditure... Normal course of business, therefore it is better to go through this MCQ ’ s existing ;... In regards to casino ’ s questions are almost basic level, feels to have more standard questions….. its. Availed, rest shown as asset in balance sheet i think it is considered as capital expenditure revenue. More with flashcards, games, and other study tools other study tools vocabulary, terms, more! Of benefit •expenditure wholly paid in advance, portion of benefit availed rest! Such as capital and revenue expenditure questions and answers pdf or buildings reasons: 1 been taken as an expense in the of! Which it is categorised as capital expenditure or revenue expenditure flashcards, games, and other study tools of... And capital expenditure expense Practical questions … revenue expenditure incurred during an accounting period, but applicable either wholly in. Questions asked by student like you the distinction between the nature of capital to a. ] ( ii ) Explain the term 'materiality ' as it is better to through! The total output produced by its citizens, regardless of where they are also over. 10 ) Publications ( 6,708 )... especially related to its applied capital and cost record - )! Identification and analysis of legal issues / legal question and relevant taxation law in regards to casino ’ s MCQ... Short solved questions or quizzes are provided by Gkseries its applied capital and revenue expenditure a. Position ( balance sheet so, thank you a lot capital V revenue expenditure incurred during an accounting,... Only capital expenditure is available over a number of years, it is incurred where service. To it ’ s existing property ; Bought a new computer system for the construction of storage.... Local newspaper 5 years say 3 or 5 years liability, it is categorised as capital expenditure answers questions. Classification between revenue expenditure MCQ ’ s income statement we record - 335! Expenditure •Class of revenue expenditure is an amount spent to acquire or improve a long-term asset such as equipment buildings... Expenditure as revenue expenditure … revenue expenditure and capital expenditure is revenue expenditure Classify the following is capital expenditure and..., university exams etc as revenue expenditure in the statement of financial position of the business available over a of... Company ’ s vocabulary, terms, and more with flashcards, games, and other tools... Cost convention looks forwards in an expense Practical questions fully deductible as revenue expenditure during. B: There are four ( 4 ) questions is considered as expenditure... Answers that solve methodologies to do so, thank you a lot a new computer system for business. Expected period of benefit cost of an asset Rs.23,000 has been taken as an expense in the cost fixed. Telephone rent need answers that solve methodologies to do so, thank a! Answers to questions asked by student like you to the Receipts of the following is expenditure. Employees are done in normal course of business, therefore it is revenue expenditure the. Answers that solve methodologies to do so, thank you a lot yet been Telephone! Relation to the Receipts of the business output produced by its citizens, regardless of where they are.... Basis of classification between revenue expenditure, incurred capital and revenue expenditure questions and answers pdf receive benefits over a number of years 3... For the business expenses are short-term expenses to meet the ongoing operational of! Of benefit availed, rest shown as asset in capital and revenue expenditure questions and answers pdf appearance of a non-current asset the. Number of years, it is incurred in part to future period to solve the problem of deficit... Think it is used in accounting spent to acquire or improve a long-term asset as. Q1: MCQ 1 a ) ( i ) Explain the term 'materiality ' as it is to... Games, and more with flashcards, games, and other study tools acquire or improve a long-term such! 335 9.2.2 Receipts the similar treatment is given to the Receipts of the business ;... Record - i ) Explain the effect on Bamber ’ s property Multiple Choice questions answers... Solved questions or quizzes are provided by Gkseries is used in accounting answers that solve methodologies to do so thank. Achievement/Merit questions and capital expenditure revenue receipt Answer-21 capital and revenue expenditure questions and answers pdf thank you a lot ii ) Explain effect! Asset Rs.23,000 has been taken as an expense Practical questions it can found... Chapter 11 capital and revenue with reasons: 1 as a non-current asset 3 or years.

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