Capital and Revenue Expenditure

Expenditure incurred for the extension of or improvement in fixed assets is

• Revenue Expenditure

• Recurring Expenditure

• Capital Expenditure

• Written off immediately out of current year profits

Which of the following is a Capital Transaction?

• Cost of Platform on which the machine will be fixed

• Wages paid for erecting the machine

• Cartage paid on acquiring the machine

• All of these

Cost of overhauling second hand machines are

• Prepaid Expenses

• Revenue Expenditure

• Outstanding Expenditure

• Capital Expenditure

An expenditure is Revenue expenditure if

• It neither affects liabilities nor assets

• It either affects liabilities or assets

• It affects both liabilities and assets

• None of these

Capital Expenditure is incurred for

• Maintaining the existing earning capacity

• Increasing the earning capacity

• Day to day conduct of business

• All of these

Money received by sale of machine is

• Revenue Receipt

• Capital Receipt

• Deferred Revenue Receipt

• Capital Expenditure

Period of benefit of capital expenditure is

• Only to the current accounting year

• More than 6 months but less than 1 year

• More than 1 year

• Less than 6 months

Fees and commission received for services rendered, interest and dividend received on Investments are examples of

• Deferred Revenue Expenditure

• Capital Receipts

• Revenue Receipts

• Revenue Expenditure

A Receipt is a Capital Receipt

• When it increases the earning capacity of the machines

• Only when it Decreases an Asset

• When it increases a liability or decreases an Asset

• Only when it Increases a liability

Carriage & freight, Customs duty, clearing charges, dock dues on Machinery acquired are examples of

• Capital Expenditure

• Revenue Expenditure

• Capital Receipt

• Revenue Receipt