Capital Expenditure and Revenue Expenditure

Which of the following is capital expenditure?

• Depreciation of machinery

• Electricity expenses

• Cost of extension to building

• Repair expenses

Which of the expenses can be considered as capital expenditure?

• Petrol costs for a delivery van

• Depreciation of a delivery van

• Repairs to a delivery van

• Adding extra headlights on a delivery van

The following are capital expenditures EXCEPT the ...

• Installation of an air conditioning system

• Decoration of office space

• Fire insurance on a building

• Renovation of office space

Which of these is NOT a list of revenue expenditure?

• Stationery, supplies, merchandise

• Rent, insurance, machine repair expense

• Office air conditioning system

• Legal fees on the assets purchased

Which of the following is a capital expenditure?

• Wages and salaries

• Insurance

• Depreciation of machinery

• Cost of upgrading machinery to increase production capacity

Which of the following expenditures incurred in connection with the acquisition of a piece of machinery should be charged to the asset account?

• Transportation charges

• Installation charges

• Both A and B

• Neither A and B

Which of the following is NOT true of revenue expenditure?

• It is an expenditure which affects the assets of the business

• It will be debited from the statement of profit or loss

• It is an expenditure which involve cash

• It is an expenditure that keeps an asset in working condition

Which of the following is NOT capital expenditure?

• Architect's fees for a new building

• Fire insurance premium on a new building

• Expenditure incurred in the construction of parking space for staff

• Air ticket paid for the purchase of machinery

Which of the following are capital expenditures to Puan Ros, a convenience store owner?

i Fitting partitions

ii Additional shop counter

iii Renewing signboards

iv New tyre for a van

• i and ii

• i, ii and iv

• ii, iii and iv

• iii and iv

Which of the following is NOT true of capital expenditures?

• It will decrease the capital of the business

• It will increase the capital of the business

• It is an expenditure that improve an asset's working condition

• It is an expenditure which involve cash