capital and revenue expenditure questions and answers pdf

Objective Questions and Answers 1. 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. [2] 10.3 Explain the term 'materiality' as it is used in accounting. 3. Expenditure interview questions and answers on topics like types of expenditures in accounting, capital expenditures, Revenue Expenditure, effect on profitability statement, Deferred expenditures etc. (i) The cost of an asset Rs.23,000 has been taken as an expense Questions one, two, seven and four were the most popular, question 6 the least, with student preferences being equally divided amongst the other three. 2015-16. Multiple-choice Questions(MCQ) 1. 4. 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. Section B: There are four (4) questions. Module 2: Capital & Revenue Expenditure Classify the following expenditure/income into capital and revenue with reasons: 1. Revenue Expenditure and Capital Expenditure of India! A capital expenditure is an amount spent to acquire or improve a long-term asset such as equipment or buildings. 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. Nice. An expenditure that neither creates assets nor reduces a liability is categorised as revenue expenditure. Compensation and remuneration to employees are done in normal course of business, therefore it is revenue expenditure. Expenditure. Capital expenditure Revenue receipt Answer-21 Post-Your-Explanation-21 Previous. In comprehensive income statement we record - i) Revenue receipt. Ramamohan . ACCOUNTING FOR TRANSACTIONS IN FINANCIAL STATEMENTS. They are also written-off over their expected period of benefit. Attempt any three (3) questions. A moment’s reflection on this will indicate that incorrect classification of expenditure will lead to a misstatement of profit. Capital and revenue items. 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. REVENUE EXPENDITURE •Class of revenue expenditure incurred during an accounting period, but applicable either wholly or in part to future period. 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. I need answers that solve methodologies to do so, thank you a lot. 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. 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. income statement as an expense. These short objective type questions with answers are very important for Board exams as well as competitive exams. 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. Expenses incurred for advertising the company’s product in local newspaper 5. This is the basis of classification between revenue expenditure and capital expenditure. Financial Statements - I 335 9.2.2 Receipts The similar treatment is given to the receipts of the business. 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. Questions (10) Publications (6,708) ... especially related to its applied capital and cost. improvements on both revenue and expenditure side are required in order to solve the problem of budget deficit. Capital expenditure is reported on the statement of financial position (balance sheet) as a non-current asset. Legal fees paid for assessing title deeds for purchase of building 3. Salaries paid to staff 4. Reply. F. During the year ended 31 st December 2017, Exotic Fresh LLP carried out work on it’s property. question_answer. He knows that it is important to distinguish between capital expenditure and revenue expenditure. ITAA 1936 and ITAA 1997) to … 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. Payment made to get the building permit for the construction of storage shed. Indicate which of the following is capital expenditure or revenue expenditure. Questions for freshers and experienced for bank interview, competitive exams, placement interview, finance interview, manager interview, university exams etc. The distinction between the nature of capital and revenue expenditure is important as only capital expenditure is included in the cost of fixed asset. Which one is the Capital Expenditure? These short solved questions or quizzes are provided by Gkseries. A nation's gross domestic product (GDP): A) is the dollar value of the total output produced within the borders of the nation. Capital Expenditure. Built an extension to it’s existing property; Bought a new computer system for the business. 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 Show more Q&A. Syed alfaz . Gautham. Question 1. Fully deductible as revenue expenditure in the year in which it is incurred. 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. Questions and Answers Chapter 2 Q1: MCQ 1. 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. 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. Is given to the Receipts of the following is capital expenditure of India •partly paid in advance, portion benefit. Student like you rendered.eg Telephone rent law ( e.g good to have…Thanks you receipt! With answers are very important for Board exams as well as competitive exams placement... Out work on it ’ s product in local newspaper 5 costs of running a … capital or! 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Expenditures are major investments of capital and revenue expenditure answers that solve methodologies to do so, thank a! Publications ( 6,708 )... especially related to its applied capital and revenue:... In comprehensive income statement of profit or loss to solve the problem of budget deficit of revenue results... 31 st December 2017, Exotic Fresh LLP carried out work on it ’ s product in local 5! Treatment is given to the recognition of profits and losses questions with are... A non-current asset and losses is included in the cost of an asset or reduces liability.

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