Question # 1

Distinction between capital and revenue items is important for the preparation

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Balance sheet

Trading and profit or loss a/c

Bank reconciliation statement

Both a & b

Wages paid for the construction of building is an example of

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Revenue expenditure

Capital expenditure

Recurring expenditure

Short-term expenditure

Which one of the following is appeared in the balance sheet

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Revenue expenditure

Capital expenditure

Deferred expenditure

Both b & c

An expenditure, which increases the utility or productive capacity of an asset is treated as

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Revenue expenditure

Capital expenditure

Deferred expenditure

None of these

Octori duty paid on machinery, is an example of

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Revenue expenditure

Recurring expenditure

Capital expenditure

Both a & b

An expenditure, which is incurred to increase to profit earning capacity of a business concern, is called

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Deferred expenditure

Current expenditure

Capital expenditure

Recurring expenditure

A revenue expenditure, the benefit of which is not confined to one accounting year is called

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Non-current expenditure

Revenue expenditure

Future expenditure

Deferred expenditure

Heavy expenditure on advertisement for making a new product is a

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Revenue expenditure

Deferred expenditure

Capital loss

Non-recurring expenditure

Expenditure is a capital expenditure because

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The amount involved is heavy

It is the personal expenditure of the owner out of his capital

It is intended to benefit the future period

It is a recurring expenditure

The transactions, the effect of which is not exhausted with in the current accounting year are called

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Revenue transaction

Capital transaction

Current transaction

Monetary transaction

Expenditure, which helps to maintain the business efficiency is called

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Revenue expenditure

Deferred expenditure

Capital expenditure

Future expenditure

The amount invested by the owner in the business to produce revenue is known as

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Income

Asset

Capital

Liability

An expenditure, which is temporarily increase the profit making capacity of the business is called

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Deferred expenditure

Capital expenditure

Revenue expenditure

Non-recurring expenditure

An expenditure, which is non-recurring and irregular is called

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Capital expenditure

Revenue expenditure

Short-term expenditure

Current expenditure

Bad debts are

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Deferred expenditure

Revenue expenditure

Capital expenditure

None of these

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Principles of accounting Icom Part 1 English Medium Chapter 13 Online Test MCQs With Answers

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