capital and revenue expenditure questions and answers pdf

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

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