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Question
Revenue expenditure is incurred ______.
Options
To improve the efficiency of an asset.
To maintain the efficiency of an asset.
To buy a fixed asset.
It involves withdrawal of capital.
Solution
Revenue expenditure is incurred to improve the efficiency of an asset.
Explanation:
Revenue expenditure is incurred for the upkeep of fixed assets such as repairs and maintenance.
RELATED QUESTIONS
This expenditure relates to normal functioning of the government departments and provision of various government services. The main examples of such expenditures are salaries, pensions, interest, subsidies, grants to the state governments, etc.
What is meant by Revenue Expenditure?
An expenditure benefiting the current year is ______ expenditure.
State with reason whether the following is Capital or Revenue Expenditure:
Freight on goods sold.
State with reason whether the following is Capital or Revenue Expenditure:
Cost of repairing machinery.
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.
Purchase of postage and stationery.
Classify the following:
Purchase of stationery.
Classify the following:
Insurance premium.
Classify the following into capital expenditure and revenue expenditure.
Insurance premium of office building.
