Following are the examples of revenue expenditure. D) purchase of furniture. Q. (ii) Purchase of Metro coaches from Japan. Which of the following is not capital expenditure? A tune-up of a company vechile. It comprises of the costs incurred for the purchase of different fixed assets. answer choices . D. Small expenditures to acquire long-lived assets, such as $13 to purchase a wastebasket. Assets acquired by incurring these expenditures are utilized by the business for a long time and thereby they earn revenue. Select one: a. repairs to motor vehicles. Power required to run machine or motor. c. cost of… Which of the following is not a capital expenditure? Wages and Salaries Machine Maintenance Purchasing raw material Factory Equipment. Still, do not forget that it`s an industry-specific ratio. 60 Qs. A) salaries and wages. Click hereto get an answer to your question ️ Identify the following as revenue expenditure and capital expenditure. Give reasons. Consider the following points to decide the nature of capital expenditure − The expenditure, the benefit of which cannot be consumed or utilized in the same accounting period should be treated as capital expenditure. a) Revenue Expenditure b) Capital Expenditure c) Deferred Revenue Expenditure d) Not an Expenditure Q5] A firm has reported a profit of Rs.1,47,000 for the year ended 31-3-2014 after taking into consideration the following items. The following are capital expenditures EXCEPT the ... answer choices . Which of the following is a capital expenditure? Wages paid for white washing of building . Which of the following are of capital nature? 52. Q. Uploaded by: darrenkanjithara. c. Salaries and wages. (i) The cost of an asset Rs.23,000 has been taken as an expense 2. State with reasons whether the following are capital or revenue expenditures: (i) A new machine is purchased for ₹ 60,000, ₹ 800 were spent on its carriage and ₹ 1,500 were paid as wages for its installation. (i) Subsidies, (ii) Grants, (iii) Repayment of loan, and (iv) Construction of school building. Renovation of office space. Payment for Machinery. Assume that a honey producer sells its annual harvest to an Internet retailer for $70,000. Cost of repair . Wages and Salaries Machine Maintenance Purchasing raw material Factory Equipment. Prev Question Next Question. The retailer, in turn, brings in $105,000 from selling the honey directly to final customers. Correct answer to the question: Of the following is a capital expenditure: a) wages paid for repair of building b) wages paid for of building c) wages paid for reconstruction of building d) wages paid for cleaning of building - eanswers.in Pages 34. An expenditure which results in the acquisition of permanent asset which is intended lo be permanently used in the business for the purpose of earning revenue, is known as capital expenditure. (iv) Grants given by central government to state Government. Salaries and wages. 1,000 is spent on its repairs, Rs. Repair expenses Cost of extension to building Depreciation of machinery Electricity expenses Which of the following is a capital expenditure: a) Wages paid for repair of building b) Wages paid for white washing of building c) Wages paid for reconstruction of building d) Wages paid for cleaning of building 2 See answers RehbarKhan RehbarKhan Answer: Here is your answer. D. Rent of a factory. Recently Asked Questions Q 4. Uploaded by: Madhuramohan. Installation of an air conditioning system. d. Depreciation. Which of the following is a revenue expenditure. Investments by businesses include capital expenditures Capital Expenditures Capital expenditures refer to funds that are used by a company for the purchase, improvement, or maintenance of long-term assets to improve on various assets. 500 is incurred to get the car registered in owner's name and Rs. 30 seconds . B. A. B. Which of these is NOT a list of revenue expenditure? WHEN REVENUE EXPENDITURE BECOMING CAPITAL EXPENDITURE Following are some of the circumstances under which an expenditure which is usually of revenue nature may be taken as an expenditure of a capital nature: 1. The contract is non-cancellable. Tags: Question 4 . Decoration of office space. Which of the following is a Revenue Expenditure? The following are illustrative examples of capital expenditures. Capital outlay b. They can be categorized into the following: Gross fixed capital. Answered By . A second hand car is purchased for Rs. The effect of capital expenditure decisions usually extends into the future. Debt service. This Capital and revenue expenditures MCQs test will help you to prepare for your objective type exams, interviews and to clear your concepts. 5 years. The following are capital expenditures EXCEPT the ... answer choices . B. These expenditures are 'non-recurring' by nature. The cash flow and capital expenditure constantly go through the business cycles of a company life. C. Wages paid for installation of machinery. Question Which of the following is a capital expenditure? Testing for use c. Uninsured theft d. Sale tax e. None… b. (v) Loan given to Union Territories. (iii) Repayment of Loan taken from World Bank. Capital Expenditure. Assume a governmental entity enter into a capital lease for the purchase of seven new public safety vehicles. Expenditure incurred in the ordinary conduct and administration of business, i.e. In cases such as mining, land is depleted of natural resources. C) repairs of motor vehicle. 3. (iii) ₹ 5,000 paid for the erection of a new machine. Giving reasons categorise the following into revenue expenditure and capital expenditure. Purchase of a Goodwill is _____. 53. Salaries and wage expenditures . Click here to get an answer to your question ️ Which of the following is the capital expenditure? Similarly, the current decisions on capital expenditure will have a major influence on the future activities of the company. b. Wages for construction of building. A. Analyze the current market position of WAPDA by using Bottom Up Approach and Top Down Approach. CAPITAL EXPENDITURES Capital expenditures are incurred when a business spends money either to buy non-current assets, or add to the value of an existing non-current asset. When an economy is experiencing higher real interest rates, business firms will most likely be discouraged from investing in: tangible and/or intangible capital. Fire insurance on a building . a. Solution for Which of the following is a capital expenditure? B) stationery. D. Both (a) and (b) Answer. D. Rent of a factory. View Answer. Solution for Which of the following expenditure is not capital expenditure for equipment? Land Land is a special type of capital expenditure as its value doesn't typically deprecate because it generally doesn't go down in value. Capital expenditure (CapEx) is a payment for goods or services recorded—or capitalized—on the balance sheet instead of expensed on the income statement. b. goods taken by owner for own use. Each question has 4 answers from which you need to choose the correct one. Stationery, supplies, merchandise. Related Questions to study. Replacement of an old motor with a new one in a piece of equipment C. A tune-up of a company vehicle D. A complete overhaul of an air-conditioning system E. The cost of installing a piece of equipment . 1,200 is paid as dealer's commission. The range of current production or manufacturing activities is mainly a result of past capital expenditures. Answer. The legal life of most patents is: A. Installation of an air conditioning system. Which of the following is not a common type of governmental fund expenditure? Capital Expenses or Expenditures are payments by a business for fixed assets, like buildings and equipment. Get Answer. Sales tax paid in conjunction with the purchase of office equipment. C. Research and development costs. 30 seconds . Expenditure incurred to acquire fixed assets for the company. 21.Which of the following is capital expenditure? (i) Salary paid to Army officers. (ii) A sum of ₹ 10,000 was spent on painting the new factory. This preview shows page 15 - 28 out of 34 pages. This includes tangible and intangible assets Example acquisition of building, land, deliver van. Purchase of a goods. (i) Store fixtures bought (ii) Wages of shop assistants (iii) The purchase of a new van (iv) Petrol for van . a. The greater capital expenditure for a firm, the lesscash flow it can use. C. Wages paid for installation of machinery. Which of the following is a capital expenditure? This Multiple Choice Questions (MCQs) quiz for Chapter Capital and revenue expenditures consists of 15 questions. If a Keynesian expenditure-output model shows that aggregate demand for both goods and labor has shifted to the left to D1, while wages remained at w0 and prices remained at P0, what will be the result? Capital expenditure or capital expense (capex or CAPEX) is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. SURVEY . Purchase of Furniture Repairs to Machinery Extension of Office Installation of Equipment. B. Next Question. Which of the following are Capital Expenditure? Purchase of goods . It was commonly accepted (although technically unresolved) that wages were not capital in nature and were therefore deductible under section 8-1 of the 1997 Act. Capital expenditure may include the following expenditures:-Expenditure incurred on the acquisition of fixed assets, ... All expenses incurred in the ordinary conduct of business, such as rent, salaries, wages, manufacturing expenses, carriage, commission, legal charges, insurance and advertisement, free samples, salaries, postage expenses etc. Which of these is NOT a list of revenue expenditure? Oil to lubricate machines. A capital expenditure. A. SURVEY . answer choices . 10,000, the amount of Rs. School Universiti Teknologi Mara; Course Title ACCOUNTING ACC406; Uploaded By hyokaz9. Wages paid to factory workers. Tags: Question 4 . (i) and (ii) are revenue expenditure because they create neither assets nor reduce liability but (iii) and (iv) are capital expenditure since (iii) reduces liability and (iv) creates an asset. A. Renovation of office space. They are important because of the following reasons: 1. Decoration of office space. It is considered a capital expenditure when the asset is newly purchased or when money is used towards extending the useful life of an existing asset, such as repairing the roof. The correct answer is D. Related: Practice and Prepare For Your Upcoming Exams; Previous Question . The addition of a building wing B. Salaries and wage expenditures c. Debt Service expenditures d. Prepayments for insurance premiums e. Items a and d only. Options. Stop wondering, read and find out how to get a quick soft loan in Nigeria. Practice important Questions. Which of the following expenditures is of capital nature? B. It`s important for the company to know how to use the cash flow. d. Depreciation. Consumer expenditures make up 71% of total expenditures while wages account for 59% of total income. Cost of repairs. Stationery, supplies, merchandise. Top Answer (i) Store fixtures bought (iii) The purchase of a new van . Monthly rent of a delivery truck. C. Payment for Salary. excess supply. Wages paid for repair of building. Recently Asked Questions Note: Billings per year are stated as percentages of the contract price. However, amount of wages and salaries paid for the erection … Assembly b. Get Answer. A. WAGES AND SALARIES: The amount spent as wages and salaries generally taken as a revenue expenses. a)wages paid for repair of building b)wages paid for white… Grewal's Accountancy Test Paper 1. Identify between capital and revenue expenditure the … Long-term Effects. Which of the following is capital expenditure? Capital expenditures can be contrasted with operational expenditures, or opex, that are immediately expensed. 2. Insurance premium on a building . Capital expenses are not used for ordinary day-to-day operating expenses of a business. Salaries and wages expenditures c. Debt service expenditures d. Prepayments for insurance premiums. Solution for 23Which one of the following is capital expenditure? 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