Capital And Revenue Expenditure MCQs

By: Prof. Dr. Fazal Rehman | Last updated: May 21, 2025

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1. : An outflow of funds to obtain an asset that will advantage the business in more than one accounting period is called:



2. : Drainage of funds to meet running outlays of a business that give benefit for the current period only is called:



3. : An expenditure that benefits the business for more than one accounting period:



4. : An expenditure that will benefit the business only in the present accounting period is considered as:



5. : An expenditure is considered revenue expenditure because:



6. : An expenditure is considered capital expenditure because:



7. : An expenditure on repair which increases production capacity of an asset:



8. : Repair of machinery which increases the useful life of an asset:



9. : Expenditure on repair of machinery which advances the production quality of an asset represents:



10. : Expenditure on repair which decreases the future operating expenses:



11. : Expenditure on repair of machinery is:



12. : Transaction having long-term effect on the financial position of business:



13. : Short-term effect of transaction on the financial position of business:



14. : Heavy expenditure, the impact of which is likely to last for more than one office period is called:



15. : Machinery having Rs.50,000 as its written down value, destroyed by fire:



16. : Raw material having WDV of worth Rs.150,000, devastated by accident is:



17. : Preliminary expenses experienced for the formation of a Joint Stock Company:



18. : Revenue losses are shown in:



19. : Legal expenses incurred in purchasing land possessions represent:



20. : A receipt is called capital reception if it is received from:



21. : A receipt is called income receipt if it is received from:



22. : A profit is capital profit if it is acknowledged from:



23. : Rs.7000 spent on the standby of worn out parts of machinery is:



24. : Cost of a motor car for resale purpose:



25. : A business bought second-hand machinery and spent Rs. 50,000 to bring it into working condition represents:



26. : It is important to differentiate capital & revenue items for groundwork of:



27. : Payment made for purchase of office furniture characterizes:



28. : Payment made for salary to staff Rs. 100,000 is measured as:



29. : Raw material demolished in fire represents:



30. : Truck destroyed in chance is considered as:



31. : Amount received against trade debt already written off as bad debts is:



32. : Expenditures for making improvements and extensions to the fixed asset:



33. : Expenses incurred to put down the machinery into working condition:



34. : What do we call the amount received from the sale of stock?



35. : Carriage paid on purchase of plant and machinery is a:



36. : Depreciation for fixed assets used in the business is an example of:



37. : All revenue expenditures are taken to:



38. : Expenditure incurred in acquiring the patent right for the business is an example of:



39. : The purchase price of a software that will be used for more than 12 months should be observed as:



40. : Distribution is made between capital and profits expenditure then:



41. : Capital expenditures are shown in:



42. : Revenue receipts are shown in:



43. : Benefit of revenue expenses extends to:



44. : Which of the following is a revenue expense?



45. : Which of the following is a capital expenditure?



46. : Which of these types of expenditure would not be treated as a Capital Expenditure?



47. : Expenses of the following nature are treated as revenue outlays except:



48. : Which one is the Capital Expenditure?



49. : If capital expense is recorded as revenue expense then which calculation will be wrong?



50. : Sale of machine in a machine marketing business is:



51. : Ahmad imports goods for his business. Import duty of goods is:



52. : Hamid purchased land for his business and paid Rs.5000 for land’s registration. This registration expense is:



53. : In comprehensive income statement we record:



54. : In statement of financial position we record:



55. : What type of transaction is “Cargo” word?



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