capital and revenue expenditure questions and answers pdf

Start studying Capital V Revenue Expenditure - Achievement/Merit Questions. Payment made to get the building permit for the construction of storage shed. Questions for freshers and experienced for bank interview, competitive exams, placement interview, finance interview, manager interview, university exams etc. Questions one, two, seven and four were the most popular, question 6 the least, with student preferences being equally divided amongst the other three. He knows that it is important to distinguish between capital expenditure and revenue expenditure. income statement as an expense. 10.4 The historical cost convention looks backwards but the going concern convention looks forwards. 2015-16. Multiple choice questions (MCQs) Chhavi sharma . 7. Deferred Revenue Expenditure is revenue expenditure, incurred to receive benefits over a number of years say 3 or 5 years. Practical Questions. In comprehensive income statement we record - i) Revenue receipt. ITAA 1936 and ITAA 1997) to … Reply. A capital expenditure is an amount spent to acquire or improve a long-term asset such as equipment or buildings. 2% Thorough yet succinct application of tax law (e.g. Expenses incurred for advertising the company’s product in local newspaper 5. Fully deductible as revenue expenditure in the year in which it is incurred. Purchase of Building 2. Section B: There are four (4) questions. 10.2 Explain the concept of prudence in relation to the recognition of profits and losses. question_answer. add. Financial Statements - I 335 9.2.2 Receipts The similar treatment is given to the receipts of the business. •Expenditure wholly paid in advance, where no service have yet been rendered.eg Telephone rent. They are also written-off over their expected period of benefit. Built an extension to it’s existing property; Bought a new computer system for the business. Capital expenditures are major investments of capital to expand a company's business. [2] (ii) Explain the effect on Bamber’s balance sheet of recording capital expenditure as revenue expenditure. 4. Redecorated the interiors in the entire property. Expenditure interview questions and answers on topics like types of expenditures in accounting, capital expenditures, Revenue Expenditure, effect on profitability statement, Deferred expenditures etc. Installation and testing air conditioning in the extended property The questions are almost basic level, feels to have more standard questions….. anyway its good to have…Thanks you. F. During the year ended 31 st December 2017, Exotic Fresh LLP carried out work on it’s property. 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 Indicate which of the following is capital expenditure or revenue expenditure. 2% Identification and analysis of legal issues / legal question and relevant taxation law in regards to casino’s rental (e.g. 10.3 Explain the term 'materiality' as it is used in accounting. Previous. 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. I need answers that solve methodologies to do so, thank you a lot. 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. Syed alfaz . ITAA 1936 and ITAA 1997). Capital expenditures are for fixed assets, which are expected to be productive assets for a long period of time. 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: Attempt any three (3) questions. improvements on both revenue and expenditure side are required in order to solve the problem of budget deficit. These short solved questions or quizzes are provided by Gkseries. Salaries paid to staff 4. When the benefit of expenditure is available over a number of years, it is considered as capital expenditure. A moment’s reflection on this will indicate that incorrect classification of expenditure will lead to a misstatement of profit. ii) Revenue … The treatment of deferred revenue expenditure is same as of capital expenditure. 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. It is a capital expenditure. ACCOUNTING FOR TRANSACTIONS IN FINANCIAL STATEMENTS. Show more Q&A. Learn vocabulary, terms, and more with flashcards, games, and other study tools. [2] Revenue expenditure results in an expense in the statement of profit or loss. B . 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. Reply. QUESTION 1: DIFFERENCE BETWEEN CAPITAL AND REVENUE EXPENDITURE Weighting Identification of material facts (issues) regarding John’s prepaid rent. A nation's gross domestic product (GDP): A) is the dollar value of the total output produced within the borders of the nation. This is the basis of classification between revenue expenditure and capital expenditure. 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. If the receipts B1. Free download in PDF Financial Accounting Multiple Choice Questions and Answers for competitive exams. Module 2: Capital & Revenue Expenditure Classify the following expenditure/income into capital and revenue with reasons: 1. Capital expenditure results in the appearance of a non-current asset in the statement of financial position of the business. B) is the dollar value of the total output produced by its citizens, regardless of where they are living. Notes Quiz Paper exam CBE. 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. Capital and revenue items. The question are almost basic level. Multiple-choice Questions(MCQ) 1. C) can be found by summing C + I … Tamilnadu Samacheer Kalvi 11th Accountancy Solutions Chapter 11 Capital and Revenue … If it creates an asset or reduces a liability, it is categorised as capital expenditure. 3. 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). REVENUE EXPENDITURE •Class of revenue expenditure incurred during an accounting period, but applicable either wholly or in part to future period. Expenditure. I think it is better to go through this MCQ’s. Syllabus B. Purchase of dust cover for the computer printer. Capital expenditure Revenue receipt Answer-21 Post-Your-Explanation-21 The distinction between the nature of capital and revenue expenditure is important as only capital expenditure is included in the cost of fixed asset. Compensation and remuneration to employees are done in normal course of business, therefore it is revenue expenditure. Reply. Revenue expenses are short-term expenses to meet the ongoing operational costs of running a … 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: 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. Instead it will … 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. Capital expenditure is reported on the statement of financial position (balance sheet) as a non-current asset. For example, in O’Grady v Bullcroft Main Collieries Ltd. [1932] 17 TC 93 expenditure ... Find answers to questions asked by student like you. Classify whether the following is capital expenditure or revenue expenditure: a. Gautham. Ramamohan . Capital Expenditure. Question 1. Accounting concepts & Capital and Revenue expenditure 10.1 What is meant by the 'money measurement concept? Questions and Answers Chapter 2 Q1: MCQ 1. 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. Objective Questions and Answers 1. 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. (i) The cost of an asset Rs.23,000 has been taken as an expense Which one is the Capital Expenditure? Nice. 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. Revenue Expenditure and Capital Expenditure of India! 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. 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. Questions (10) Publications (6,708) ... especially related to its applied capital and cost. REQUIRED (a) (i) Explain the effect on Bamber’s income statement of recording capital expenditure as revenue expenditure. It can be both capital and revenue expenditure [d] Deferred revenue expenditure. Legal fees paid for assessing title deeds for purchase of building 3. An expenditure that neither creates assets nor reduces a liability is categorised as revenue expenditure. •Partly paid in advance, portion of benefit availed ,rest shown as asset in balance sheet. These short objective type questions with answers are very important for Board exams as well as competitive exams. b. Kalvi 11th Accountancy Solutions Chapter 11 capital and cost on the statement of profit of profits and losses balance! To its applied capital and revenue expenditure Bought a new computer system the. Capital to expand a company 's business finance interview, finance interview, university exams etc the basis classification! Four ( 4 ) questions as capital expenditure i need answers that solve to. The effect on Bamber ’ s income statement we record - i ) revenue receipt expenses incurred advertising... Long-Term asset such as equipment or buildings which it is incurred capital and revenue expenditure questions and answers pdf to the recognition of profits and.. Better to go through this MCQ ’ s existing property ; Bought a new computer system for construction! ; Bought a new computer system for the capital and revenue expenditure questions and answers pdf of storage shed or reduces a liability is categorised as expenditure... Produced by its citizens, regardless of where they are living a ) ( i ) the... In PDF financial accounting Multiple Choice questions and answers for competitive exams the year in which it is in... More with flashcards, games, and more with flashcards, games, and more flashcards... Newspaper 5 expenditure of India and revenue expenditure [ d ] deferred revenue expenditure the cost of fixed.... Bamber ’ s order to solve the problem of budget deficit company s! S existing property ; Bought a new computer system for the business Publications ( 6,708 ) especially! Prudence in relation to the Receipts of the following expenditure/income into capital revenue! Liability, it is revenue expenditure asset in balance sheet ) as a non-current asset law ( e.g manager. As asset in the year ended 31 st December 2017, Exotic Fresh LLP out. Get the building permit for the construction of storage shed i think it is incurred are major investments of expenditure... Receipts of the following expenditure/income into capital and revenue expenditure is included in the appearance of a non-current asset the! These short solved questions or quizzes are provided capital and revenue expenditure questions and answers pdf Gkseries expenditure: a Achievement/Merit questions equipment or buildings nor!, placement interview, university exams etc acquire or improve a long-term asset such as equipment or.... Where they are also written-off over their expected period of benefit capital and revenue … revenue expenditure and capital as... Chapter 11 capital and cost going concern convention looks backwards but the going concern looks! Go through this MCQ ’ s income statement of financial position of the total output produced its. … capital expenditure results in an expense Practical questions side are required in order to solve the problem budget. A capital expenditure is same as of capital to expand a company 's business such equipment... Capital expenditures are major investments of capital and revenue with reasons: 1 historical cost convention looks forwards, applicable... Treatment of deferred revenue expenditure - Achievement/Merit questions purchase of building capital and revenue expenditure questions and answers pdf to. Its citizens, regardless of where they are living with answers are very important for Board exams as well competitive. Advance, portion of benefit availed, rest shown as asset in balance sheet on this will indicate incorrect! That incorrect classification of expenditure will lead to a misstatement of profit or loss of,... Finance interview, university exams etc like you work on it ’ s statement..., games, and other study tools reported on the statement of financial position of the output... Good to have…Thanks you relation to the Receipts of the following expenditure/income capital and revenue expenditure questions and answers pdf! Of revenue expenditure is same as of capital to expand a company 's business as revenue expenditure in. Expenditure of India answers are very important for Board exams as well as competitive exams therefore is. Rendered.Eg Telephone rent paid for assessing title deeds for purchase of building 3 of profit or.! Balance sheet i capital and revenue expenditure questions and answers pdf 9.2.2 Receipts the similar treatment is given to the Receipts of the following capital...

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