Capital Expenditure and Revenue Expenditure DRAFT. •Expenditure wholly paid in advance, where no service have yet been rendered.eg Telephone rent. It’s not enough to say that capital expenditures are everything that revenue expenditures aren’t. Ans. Capital expenditure is expenditure relating to the purchase of non-current assets which are not for resale and are used within the business. Plus, get practice tests, quizzes, and personalized coaching to help you succeed. Capital expenditures vs. revenue expenditures. Remember Multiple choice questions are having good weightage in the total marks of … by nurfitridewi95_51731. Income Statement. 2. Revenue expenditures and capital expenditures are both completely different things as a one. a) CAPITAL EXPENDITURE is money spent to buy fixed assets. How to measure the acquisition cost of property, plant and equipment? The business expenditures are of two types:- Capital expenditures Revenue expenditures Capital expenditures Definition and explanation of capital expenditures: An expenditure is a capital expenditure if the benefit of the expenditure extends to several trading years. A capital expenditure is an amount spent to acquire or significantly improve the capacity or capabilities of a long-term asset such as equipment or buildings. EXERCISE 4 Capital & Revenue Expenditure Consider the following list of expenses incurred by a company: A. Comparison Between Different Cost Flow Assumptions, Application of different Cost Flow Assumptions, How to Determine the Cost of Ending Inventory, Time series analysis and seasonal variations, Introduction to cost accounting – MCQs quiz, Cost Concept, Analysis and Classifications MCQs. Browse more Topics under Capital And Revenue Expenditure And Receipts. They’re listed on the Income Statement to calculate the net profit of any accounting period. 0. - Definition & Types, Measuring Property, Plant & Equipment Asset Efficiency, Adjusting Accounts and Preparing Financial Statements, Merchandising Operations and Inventory in Accounting, Completing the Operating Cycle in Accounting, Current and Long-Term Liabilities in Accounting, Reporting & Analyzing Equity in Accounting, Financial Statement Analysis in Accounting, Working Scholars® Bringing Tuition-Free College to the Community, Identify different types of business expenditures, Explain how depreciation helps with business costs, Understand how categorizing expenditures affects a balance sheet. Duration : Revenue expenditure is made during the short-term. 6. These are recurring in nature and are allocated to the profit and loss account of the same year. Capital and revenue expenditures are two different types of business expenditures that we often find in financial accounting and reporting. This worksheet has been prepared based on CIE past papers and CIE syllabus for O levels & AS levels. Freight paid on machinery purchased is a: 10. Exercise 4 capital revenue expenditure consider the. 's' : ''}}. Direct and indirect. An exercise • State the nature of the following transactions: 1. The major difference between revenue and capital expense is that capital expenditure is calculated over an extended period, while revenue expense is for a shorter period. Capital vs Revenue Expenditure Identify whether the expenses listed are capital expenses or revenue expenses Revenue Expenditure: Capital Expenditure: Definition: The expenses a firm incurs each day to maintain its daily business activities are revenue expenditure. Receipts and invoices keep the records of expenditures. Which of the following is capital expenditure? nurfitridewi95_51731. a quick aid to distinguish between capital and revenue expenditure, simple activity included. ! 1. Cost of software for use with the microcomputer. Capital versus Revenue expenditure . Activity slide could be used as a Plenary!! Save. This Capital and revenue expenditures MCQs test will help you to prepare for your objective type exams, interviews and to clear your concepts. Edit. 3 months ago. Interest on loan to purchase microcomputer. It refers to the distinction of capital from revenue expenditure for tax purposes. 66% average accuracy. Play this game to review Business. [a] Capital invested by the owner [b] Selling expense for machine [c] Machine purchased [d] Daily expenses to operate business. Let us learn more about them. aishahkamal91_18762. tax rate increases with increase in income) to redistribute income from rich to poor. Exercise 4 capital revenue expenditure consider the. Earn Transferable Credit & Get your Degree, Create your account to access this entire worksheet, A Premium account gives you access to all lesson, practice exams, quizzes & worksheets. In its place, they are the repetitive or routine expenses that occur in the usual business. The following objectives are covered in this lesson: 14 chapters | According to the given information, John has a casino – The Casino East - in Melbourne for which he has to pay $80 million as a casino's rental payment for a period of 10 years. REVENUE EXPENDITURE •Class of revenue expenditure incurred during an accounting period, but applicable either wholly or in part to future period. IDEAL / CPT / ACCOUNTS / CAPITAL & REVENUE EXPENDITURE 51 Capital and Revenue Expenditure Capital Revenue 1) Long Term benefit Short Term benefit (Maximum 12 months) 2) Non-recurring or One time expenditure. What is a capital expenditure versus a revenue expenditure? (a) Capital expenditures (b) Revenue expenditures (c) Capital receipt (d) Revenue receipt 20. [a] Bank balance [b] Debtors [c] Creditors [d] Net profit. flashcard sets, {{courseNav.course.topics.length}} chapters | Revenue expenditure refers to expenses incurred in the day to day running of the business. The lesson titled Comparing Revenue Expenditure & Capital Expenditures is a great source for more information on this accounting subject. Cash flow from operating activities: 4,37,86,000: Cash flow from investing … 56% average accuracy. Capital expenditure constitutes those expenses that are typically incurred while acquiring capital assets or upgrading the current ones. All rights reserved. Carriage paid on the purchase of furniture is a: 11. English, science, history, and more. Multiple choice questions (MCQs) Posted in: Capital and revenue items (quizzes) ABOUT THIS QUIZ: Chapter: Capital and revenue items; Quiz Type: Multiple choice questions (MCQs) Number of … 1. 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