Advertisements
Advertisements
Question
Classify the following into Capital and Revenue Expenditure.
Money spent on extension of factory premises.
Solution
Capital Expenditure
Reason:
This is a Capital Expenditure as it was incurred to create a permanent asset, such as factory buildings.
APPEARS IN
RELATED QUESTIONS
Pre-operative expenses are ______.
Expenses incurred to repair a second-hand machine, purchase by the firm, to make it usable are treated under which expenditure?
Match the Column I and Column II:
| Column - I | Column - II | ||
| (a) | Preliminary expenses of ₹ 5,000. | i | Capital Expenditure |
| (b) | Purchase of old machine for ₹ 9,500. | ii | Revenue Expenditure |
| (c) | Wage paid ₹ 1,500 for carriage for goods. | iii | Deferred Revenue Expenditure |
| (d) | Loan received from Banks ₹ 10,00,000. | iv | Capital Receipts |
Why is it necessary to differentiate between capital and revenue items in accounting?
Classify the following into Capital, Revenue and Deferred Revenue Expenditures, reason for your answer.
Temporary huts built at a cost of ₹ 3,000 for construction of factory buildings. The huts were demolished when the factory building was ready.
State whether the following expense is Capital or Revenue.
Cost of raising a loan.
State whether the following expense is Capital or Revenue.
Purchase of a computer for the office.
In the following case indicate the amount to be debited as Capital Expenditure and Revenue Expenditure:
A total expenditure of ₹ 50,000 was incurred on factory buildings out of this 20% related to repairs and 80% related to extensions.
In the following case indicate the amount to be debited as Capital Expenditure and Revenue Expenditure:
Second hand motor van worth ₹ 60,000 was purchased and repairing of this cost ₹ 8,000.
Which of the following are Capital Expenditure, Revenue Expenditure and Deferred Revenue Expenditure?
Amount paid for acquiring goodwill.
