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Question
Classify the following into Capital, Revenue and Deferred Revenue Expenditures, reason for your answer.
Premium ₹ 8,000 given for a lease.
Solution
Capital Expenditure
Reason:
A fixed asset is a lease.
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RELATED QUESTIONS
Expenses incurred for construction of a building are classified as ______.
An expenditure is a capital expenditure when ______.
______ is an example of Capital Expenditure.
Match the Column I and Column II:
| Column - I | Column - II | ||
| (a) | Capital Expenditure | i | Repairs costing ₹ 600 carried out on a boiler. |
| (b) | Revenue Expenditure | ii | Advertising expenses ₹ 25,000 incurred for launching a new product in the market. |
| (c) | Deferred Revenue Expenditure | iii | Interest received. |
| (d) | Revenue Receipts | iv | A sum of ₹ 15,000 spent on the overhauling of a second-hand delivery van. |
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?
Which of the following are Capital Expenditure, Revenue Expenditure and Deferred Revenue Expenditure?
Wages paid to workers for installation of machinery in the factory.
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 you would consider the following as Capital Expenditure or Revenue Expenditure.
Overhaul expenses of second hand typewriters purchased.
Which of the following are Capital Expenditure, Revenue Expenditure and Deferred Revenue Expenditure?
Cost of painting the name of the company and other advertisement message on a newly purchased delivery van.
