Tag Archives: revenue expenditure

Rectification of Errors Important Question 3 for I.Com Part 1

Rectification of Errors Important Question 3 for I.Com Part 1 Correct the following errors by passing journal entries (i) The purchase book was under casted Rs. 1,000. (ii) Machinery bought Rs.1,000 posted as purchases. (iii) Sales book was overcastted Rs. 550. (iv) Sold old furniture for Rs.250 passed through the day book. (v) Carriage on machinery Rs. 500 has been …

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Capital and Revenue Important Question 5 for I.Com Part 1

Capital and Revenue Important Question 5 for I.Com Part 1 Would you consider the following as Revenue or Capital expenditure? State your reasons in each case   (i) Repairs and renewal of plant and machinery. (ii) Wages paid on erection of machinery. (iii) Purchase of patent rights. (iv) Cost of goodwill. (v) Carriage paid on goods purchased.   Solution   …

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Capital and Revenue Important Question 4 for I.Com Part 1

Capital and Revenue Important Question 4 for I.Com Part 1 State with reasons whether the following items are capital or revenue   (i) Carriage paid on goods purchased. (ii) Repair to motor car purchased second hand. (iii) Legal expenses paid in connection with purchases of building. (iv) Paid electricity bill of the company. (v) Cost of patent rights acquired.   …

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Capital and Revenue Important Question 2 for I.Com Part 1

Capital and Revenue Important Question 2 for I.Com Part 1 State with reasons which the following items are capital or revenue   (i) Wages paid to factory workers for the extension of the building. (ii) Money spent on repairs of building. (iii) Cost incurred in purchasing a patent. (iv) Interest paid on a loan taken for the purchase of machinery. …

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Capital and Revenue Important Question 1 for I.Com Part 1

Capital and Revenue Important Question 1 for I.Com Part 1 State with reasons which of the following items are capital or revenue   (i) Cost incurred on addition to the existing building. (ii) Purchased furniture for business use. (iii) Cost incurred on purchasing second hand motor truck. (iv) Carriage paid on goods purchased. (v) Compensation paid to workers in termination …

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What is the difference between capital expenditure and revenue expenditure?

What is the difference between capital expenditure and revenue expenditure? Revenue expenses are costs in the four day to day running of the business for example servicing a machine, spare parts etc. Revenue expenditure is normally charged against profit in the Income statement in the year it is expensed. Capital expenditure is on an item that will help generate profits …

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What is revenue expenditure?

What is revenue expenditure? Revenue expenditure incurred on fixed assets includes costs that are aimed at ‘maintaining’ rather than enhancing the earning capacity of the assets. These are costs that are incurred on a regular basis and the benefit from these costs is obtained over a relatively short period of time. For example, a company buys a machine for the …

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