1. An outflow of funds to obtain an asset that will advantage the business in more than one accounting periods is called:
(a) Revenue expenditure
(b) Deferred revenue expenditure
(c) Capital expenditure
(d) Revenue loss
Capital expenditure
2. Drainage of funds to meet running outlays of a business that give benefit for the current period only is called:
(a) Capital expenditures
(b) Revenue expenditures
(c) Capital loss
(d) Deferred revenue expenditures
Revenue expenditures
3. An expenditure that benefits the business for more than one accounting periods:
(a) Capital loss
(b) Capital expenditure
(c) Capital profit
(d) Deferred expenditure
Capital expenditure
4. An expenditure that will benefit the business only in present accounting period is considered as:
(a) Capital expenditure
(b) Revenue expenditure
(c) Current expenditure
(d) Deferred revenue expenditure
Revenue expenditure
5. An expenditure is considered revenue expenditure because:
(a) Purchase of current asset
(b) Payment of current liability
(c) It benefits the current period
(d) It benefits the future periods
It benefits the current period
6.An expenditure is considered capital expenditure because:
(a) It is operating expenditure
(b) It is amount is large
(c) It benefits the future periods
(d) None of these
It benefits the future periods
7. An expenditure on repair which increases production capacity of asset:
(a) Capital expenditure
(b) Revenue expenditure
(c) Deferred revenue expenditure
(d) Future expenditure An expenditure
(a) Capital expenditure
8. Repair of machinery which increases the useful life of an asset:
(a) Capital expenditure
(b) Revenue expenditure
(c) Deferred revenue expenditure
(d) Future expenditure
Capital expenditure
9. Expenditure on repair of machinery which advances the production quality of an asset represents:
(a) Capital expenditure
(b) Revenue expenditure
(c) Further expenditure
(d) Future expenditure
Capital expenditure
10. Expenditure on repair which decreases the future operating expenses:
(a) Capital expenditure
(b) Deferred revenue expenditure
(c) Repair expenditure
(d) Future expenditure
Capital expenditure
11. Expenditure on repair of machinery is:
(a) Capital expenditure (b) Revenue expenditure
(c) Deferred revenue expenditure
(d) Current expenditure
Revenue expenditure
12. Transaction having long term effect on the financial position of business:
(a) Future expenditure
(b) Capital expenditure
(c) Revenue expenditure
(d) Long term expenditure
Future expenditure
13. Short term effect of transaction on the financial position of business:
(a) Current, expenditure
(b) Revenue expenditure
(c) Short term expenditure
(d) Capital expenditure
Revenue expenditure
14. Heavy expenditure, the impact of which is likely to last for more than one office periods is called
(a) Revenue expenditure
(b) Deferred revenue expenditure
(c) Future expenditure
(d) (a) and (b)
Deferred revenue expenditure
15. Machinery having Rs.50000 it’s written down value, destroyed by fire:
(a) Capital expenditure
(b) Revenue expenditure
(c) Revenue loss
(d) Capital loss
Capital loss
16. Raw material having WDV of worth Rs.150000, devastated by accident is:
(a) Capital expenditure (b) Revenue expenditure
(c) Revenue loss
(d) Capital loss
Revenue loss
17. Preliminary expenses experienced for the formation of Joint Stock Company:
(a) Capital loss
(b) Revenue loss
(c) Capital expenditures
(d) Deferred revenue expenditures
Deferred revenue expenditures
18. Revenue losses are shown in:
(a) Trading account
(b) Income statement
(c) Balance sheet
(d) Expenditure statement
Income statement
19. Legal expenses incurred in purchasing land possessions represent:
(a) Capital expenditures
(b) Revenue expenditures
(c) Revenue loss
(d) Deferred revenue expenditures
Capital expenditures
20. A receipt is called capital reception if it is received from:
(a) Sale of fixed asset
(b) Capital introduced by proprietor
(c) Premium on issue of shares
(d) All of the above
All of the above
21. A receipt is called income receipt if it is received from:
(a) Sale of goods
(b) Discount received
(c) Interest received
(d) All of the above
All of the above
22 A profit is capital profit if it is acknowledged from:
(a) Sale of fixed assets
(b) Premium on issue of shares
(c) Sale of goods
(d) (a) and (b)
(a) and (b)
23. Rs.7000 spent on the standby of 23worn out parts of machinery is:
(a) Capital expenditure
(b) Revenue expenditure
(c) Capital loss
(d) Deferred revenue expenditure
Revenue expenditure
24. Cost of a motor car for resale purpose
(a) Capital expenditure
(b) Revenue expenditure
(c) Deferred revenue expenditure
(d) None of above
Revenue expenditure
25. A business bought second-hand machinery and spent Rs. 50000 to bring it into working condition represent:
(a) Revenue expenditure
(b) Deferred revenue expenditure
(c) Capital expenditure
(d) Repair expenditure
Capital expenditure
26. It is important to differentiate capital & revenue items for groundwork of:
(a) Final accounts
(b) Cash book
(c) Bank reconciliation statement
(d) Work sheet
Final accounts
27. Payment made for purchase of office furniture characterizes:
(a) Revenue expenditure
(b) Deferred revenue payment
(c) Revenue payment
(d) Capital payment
Capital payment
28. Payment made for salary to staff Rs. 100,000 is measured as:
(a) Capital payment
(b) Revenue payment
(c) Deferred revenue payment
(d) None of these
Revenue payment
29. Raw material demolished in fire represents:
(a) Capital loss
(b) Revenue loss
(c) Accidental loss
(d) (a) and (b)
Revenue loss
30. Truck destroyed in chance is considered as
(a) Revenue loss
(b) Capital loss
(c) Revenue expenditure
(d) Capital payment
Capital loss
31. Fee for renewal of obvious is:
(a) Capital expenditure
(b) Revenue expenditure
(c) Deferred revenue expenditure
(d) None of these
Revenue expenditure
32. Cost of air training time office is:
(a) Capital expenditure
(b) Revenue expenditure
(c) Capital loss
(d) Deferred revenue expenditure
Capital expenditure
33, Amount received from sale of ended goods is all
(a) Sale receipt
(b) Capital receipt
(c) Revenue receipt
(d) Capital profit
Revenue receipt
34. Wages paid to worker for creation of machinery is:
(a) Capital expenditure
(b) Revenue expenditure
(c) Capital loss
(d) Revenue loss
Capital expenditure
35. The capital receipts are accessible in the balance sheet on the:
(a) Credit side
(b) Debit side
(c) Liability side
(d) None of these
Liability side
36. A payment for freight on equipment purchased is called:
(a) Capital payment
(b) Revenue payment
(c) Capital receipt
(d) Revenue receipt
Capital payment
37. A payment for cargo on raw material purchased is called:
(a) Capital payment
(b) Revenue payment
(c) Deferred revenue payment
(d) None of these
Revenue payment
38. Loss incurred on issuance 38 debentures is:
(a) Capital loss
(b) Revenue loss
(c) Deferred revenue loss
(d) None of these
Capital loss
39. A loss which is occurred dune ordinary activities of a business is
(a) Revenue loss
(b) Capital loss
(c) Ordinary loss
(d) None of these
Revenue loss
40. Money obtailled through bank loan
(a) Capital receipt
(b) Revenue receipt
(c) Capital profit
(d) None of these
Capital receipt
41. Amount received against trade debit already written off as bad debts is:
(a) Capital receipt
(b) Revenue receipt
(c) Bad debts receipt
(d) Abnormal receipt
Revenue receipt
42. Expenditures for making improvements and extensions to the fixed asset:
(a) Revenue expenditure
(b) Capital expenditure
(c) Deferred revenue expenditure
(d) Current expenditure
Capital expenditure
43. Expenses incurred to put down the machinery into working condition:
(a) Revenue expenditures
(b) Revenue loss
(c) Capital expenditures
(d) None of these
Capital expenditures
44. What do we call the amount received from the sale of stock?
(a) Revenue receipt
(b) Capital receipt
(c) Capital expenditure
(d) Revenue expenditure
Revenue receipt
45. Carriage paid Ca machinery is a: on purchase of plant and
(a) Capital expenditure
(b) Revenue expenditure
(c) Capital loss
(d) Revenue loss
Capital expenditure
46. Depreciation for fixed assets used in the business is an example of
(a) Capital expenditure
(b) Revenue expenditure
(c) Deferred expenditure
(d) None of these
Revenue expenditure
47. All revenue expenditures are taken to
(a) Trading account
(b) Trading and profit and loss account
(c) Profit or loss account
(d) Balance sheet
Trading and profit and loss account
48. Expenditure incurred in acquiring the patent right for the business is an example of:
(a) Revenue expenditure
(b) Capital expenditure
(c) Deferred revenue expenditure
(d) Administrative expenditure
Capital expenditure
49. The purchase price of a software that will be used for more, than 12 months should be observed as:
(a) Revenue expenditure
(b) A capital expenditure
(c) A long term expense
(d) An accounting period expense
A capital expenditure
50. Distribution is made between 50 capital and profits expenditure then:
(a) The figure of debtors and creditors will be incorrect
(b) Cash or bank figure will be incorrect
(c) Net profit will be incorrect
(d) Balance sheet will not balance
Net profit will be incorrect
51. Capital expenditure are shown in
(a) Balance Sheet
(b) Profit and Loss A/c
(c) Trading A/c
(d) None of these
Balance Sheet
52. Revenue receipts are shown in
(a) Balance Sheet
(b) Profit and Loss appropriation A/c
(c) Manufacturing A/(c)
(d) Trading and Profit and Loss A/c
Trading and Profit and Loss A/c
53. Benefit of revenue expenses extends to:
(a) 10 years
(b) 5 years
(c) One accounting year
(d) As long as the business continues
One accounting year
54. Which of the following is a revenue expenses?
(a) Raw material consumed
(b) Plant purchased
(c) Long term loan rose from bank
(d) Share Capital
Raw material consumed
55. Which of the following is a capital expenditure?
(a) Repair of plant and machinery
(b) Salary paid to workers
(c) Cost of stand by equipment
(d) Annual whitewash of the office building
Cost of stand by equipment
56. Which of these types of expenditure would not be treated as a Capital Expenditure?
(a) Acquisition of an Asset
(b) Extension of an Asset
(c) Improvement of the existing Asset
(d) Maintenance of the Asset
Maintenance of the Asset
57. Expenses of the following nature are treated as a Revenue outlays except:
(a) Expenses for day to day running of the business
(b) Putting the new asset in working condition
(c) Depreciation
(d) Purchase of raw material
Putting the new asset in working condition
58. Which one is the Capital Expenditure?
(a) Capital invested by the owner
(b) Selling expense for machine
(c) Machine purchased
(d) Daily expenses to operate business
Machine purchased
59. If capital expense is recorded as revenue expense then which calculation will be wrong?
(a) Bank balance
(b) Debtors
(d) Net profit
Net profit
61. Sale of machine of machine marketing business:
(a) Capital receipt
(b) Capital income
(c) Revenue income
(d) Revenue receipt
Revenue receipt
62. Ahmad import goods for his business. Import duty of goods is:
(a) Capital expenditure
(b) Revenue expenditure
(c) Non-trading expenditure
(d) Revenue income
Revenue expenditure
63. Hamid purchased a land for his business. He paid Rs.5000 for land’s registration. This registration expenses is:
(a) Revenue expenditure
(b) Capital expenditure
(c) It can be both capital and revenue expenditure
(d) Deferred revenue expenditure
Capital expenditure
64. In comprehensive income statement we record:
1 Revenue receipt, 11 Revenue income, III Capital expenditure
(a) II
(b) II&III
(c) I&III
(d) II
II
65. In statement of financial position we record:
1. Capital receipt
II. Revenue expenditure
III. Postponed Revenue expenditure
(a) I
(b) 1&11
(c) II&III
(d) I&III
I&III
66. What type of transaction is Cargo word?
(a) Revenue
(b) Capital
(c) Deferred revenue
(d) Operating
Revenue