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प्रश्न
What is meant by Revenue Expenditure?
What is meant by the term 'Revenue Expenditure'?
उत्तर
- Revenue expenditure refers to regular expenses incurred for commercial operations, such as stock purchases, carriage, and freight.
- Accrual accounting assumes that revenue is recognised when earned and expenses are recognised when incurred. Revenue expenditures are charged to the Income Statement as they occur. This aligns with the Matching Principle, which states that expenses should be reported in the same month they occur.
- The advantage from revenue expenditures is for the current fiscal year. Examples of revenue expenditures include wages and salaries, printing and stationery, electricity and repair expenses, inventory, postage, insurance, and taxes.
Notes
Students should refer to the answer according to their questions.
APPEARS IN
संबंधित प्रश्न
'Whether an expenditure is of revenue or capital nature, is a question of fact and must depend on the circumstances of each case." Comment, giving appropriate examples.
An expenditure benefiting the current year is ______ expenditure.
State with reason whether the following is Capital or Revenue Expenditure:
Compensation paid to retrenched workers.
State whether the following is Capital, Revenue or Deferred Revenue Expenditure.
Cost of removing the stock to a better located site.
State whether the following is Capital, Revenue or Deferred Revenue Expenditure.
Damages paid by a transport company to its passengers injured in an accident.
Classify the following into Capital, Revenue and Deferred Revenue Expenditures, reason for your answer.
₹ 20,000 spent on dismantling, removing and reinstalling plant and machinery.
State whether the following expense is Capital or Revenue.
Fire insurance premium on premises.
Classify the following into Capital and Revenue Expenditure.
Freight on goods purchased.
Which of the following are Capital Expenditure, Revenue Expenditure and Deferred Revenue Expenditure?
Wages, salaries and rent outstanding.
Classify the following into capital expenditure and revenue expenditure.
Insurance premium of office building.
