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WorksheetsCHAPTER 5-CAPITAL& REVENUE EXPENDITURE
Total questions: 10
Worksheet time: 8mins
Expenditures relating to the acquisition of non current assets are treated as
capital expenditure
revenue expenditure
expenses
revenue
Expenditures for the maintenance of non-current assets are treated as
revenue expenditure
capital expenditure
revenue
expenses
below are the examples of CE EXCEPT for
Legal costs
Installation costs
Costs to acquire non-current assets
Fuel for motor vehicles
below are the examples for RE EXCEPT for
Repairs of motor vehicle
Depreciation of non-current assets
Installation costs
Motor vehicle insurance
The CE will increase the value of the non currents in the
balance sheet (statements of financial position)
profit and loss (statements of profit and loss
accounting equations
journal
The RE costs will reduce the net profit at
balance sheet (statement of financial position)
profit and loss (statement of profit and loss)
accounting equations
journal
Expenditures for the Extensions or additions to buildings of non-current assets are treated as
revenue expenditure
capital expenditure
revenue
expenses
The CE costs will increase the value of NCA at
balance sheet (statement of financial position)
profit and loss (statement of profit and loss)
accounting equations
journal
If RE are wrongly classified as CE:
The expenses will be overstated
the net profit will be understated
The NCAs & the capital of organization will be understated
The NCAs & the capital of organization will be overstated
If CE are wrongly classified as RE:
The expenses will be understated
the net profit will be overstated
The NCAs & the capital of organization will be understated
The NCAs & the capital of organization will be overstated
