a) What is the effect if Capital expenditure is incorrectly recorded as Revenue . Revenue Expenditure: It constitutes the expenditure incurred for the payment of money for services of whatever type such rent, salaries, commission, repair, carriage etc. Remember Multiple choice questions are having good weightage in the total marks of … Revenue Expenditure. Cost and income for managers . A revenue expenditure on the other hand is an amount that is used immediately. Capital Expenditure. You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments.. Total revenue is the aggregate of all transactions recorded under resources in the ESA framework, including subsidies receivable in the current accounts and capital transfers receivable recorded in the capital account. Dec 26,2020 - Test: Capital And Revenue Expenditures And Receipts - 1 | 30 Questions MCQ Test has questions of CA Foundation preparation. It is not until the expenditure is recorded as an expense that income is impacted. c) Bought car cushion for the new car. Budget to Recorded Revenue and Expenditure Variance Reporting For the month end May FY2019 Confidential 1. This cost is recorded in an account that is classified as Property. Revenue expenditures are recorded in the Manufacturing account, Trading account and Profit & loss account. •Revenue and expenditure report due date –December 31st, CCR, Section 3510. d) Bought air freshener for the new car. Incorrect treatment of expenditure . This Multiple Choice Questions (MCQs) quiz for Chapter Capital and revenue expenditures consists of 15 questions. Revenue expenditures are recorded in the (a) Manufacturing A/c (b) Trading A/c (c) P & L A/c (d) All the above 10. Revenue expenditures or operating expenses are recorded on the income statement. Please note, revenue expenses does not increase the efficiency of the firm for long term. Heavy amount spent for the advertisement of new company product is (a) Revenue expenditure (b) Deferred revenue expenditure (c) Capital expenditure (d) Either (a) or (c) 11. Disclaimers General Disclaimer-This document may contain capitalized terms that are not defined herein, or may contain terms that are discussed in other documents or that are commonly understood. Railway expenditure is financed from (loan) Capital provided by the General Revenues, Railway Funds and Current Revenues. Company's tax liability for a particular year. a) Purchase of new car for business manager. 3. Capital expenditure is recorded as a Non-Current Asset; revenue expenditure is recorded as an expense or current asset 6 Identify if the following is capital or revenue expenditure and state why. (xxxiv) Capital expenditure. As a slate roof is replaced by a glass roof, it will increase the efficiency of the building and therefore, it is a capital expenditure. In 2016, the State’s capital expenditure on military equipment has been revised upwards by 1.6 billion. On the other hand, revenue expenditure is deducted from an entity 's ' profit in the statement of comprehensive income. It doesn’t increase the profit earning capacity but merely maintains it at existing level. Whereas the initial purchase and installation costs would be classified as capital expenditure, any subsequent repair and maintenance charges incurred in the future will be classified as revenue expenditure. Apart from the cost of land ever other cost is charged to the depreciation expense over the useful life period of the asset. When expensing the item, it goes into the expense side of the income statement, whereas, capitalizing an item will be processed on the balance sheet. Revenue is used as an indication of earnings quality. Capital expenditure, except for the cost of land, is usually depreciated or amortized over the economic useful life of the asset. b) Paid for the certificate of entitlement of the new car. in scope and nature of this Budget vs Recorded Revenue and Expenditure report with other reporting. In the EU-28 in 2016, central government accounted for 51.9 % of total revenue and 37.6 % of total expenditure of general government. revenue expenditure normally benefits one accounting year. Revenue expenditure is treated as an expense and is recorded in the income statement, whereas capital expenditure is recorded as an asset in the balance sheet and expensed over the useful life of the asset. True. Participate in class discussion. This test is Rated positive by 91% students preparing for CA Foundation.This MCQ test is related to CA Foundation syllabus, prepared by CA Foundation teachers. 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