(ii) Purchase of Metro coaches from Japan. Testing for use c. Uninsured theft d. Sale tax e. None… Purchase of a goods. b. goods taken by owner for own use. 1,200 is paid as dealer's commission. Which of the following are of capital nature? A. The greater capital expenditure for a firm, the lesscash flow it can use. C) repairs of motor vehicle. Cost of repair . 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. Which of these is NOT a list of revenue expenditure? (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. B. The legal life of most patents is: A. 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 B) stationery. Tags: Question 4 . Capital Expenses or Expenditures are payments by a business for fixed assets, like buildings and equipment. Give reasons. A. Which of the following is a capital 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. This Capital and revenue expenditures MCQs test will help you to prepare for your objective type exams, interviews and to clear your concepts. A tune-up of a company vechile. In cases such as mining, land is depleted of natural resources. Debt service. b. Oil to lubricate machines. A capital expenditure. 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. They can be categorized into the following: Gross fixed capital. d. Depreciation. (ii) A sum of ₹ 10,000 was spent on painting the new factory. Uploaded by: darrenkanjithara. 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. (i) The cost of an asset Rs.23,000 has been taken as an expense However, amount of wages and salaries paid for the erection … Stop wondering, read and find out how to get a quick soft loan in Nigeria. Power required to run machine or motor. SURVEY . Decoration of office space. Pages 34. Recently Asked Questions Q 4. 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. Decoration of office space. 2. Solution for Which of the following expenditure is not capital expenditure for equipment? Related Questions to study. Installation of an air conditioning system. (iv) Grants given by central government to state Government. 500 is incurred to get the car registered in owner's name and Rs. (iii) ₹ 5,000 paid for the erection of a new machine. excess supply. Cost of repairs. B. d. Depreciation. Assets acquired by incurring these expenditures are utilized by the business for a long time and thereby they earn revenue. The contract is non-cancellable. 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. Wages paid for white washing of building . Click hereto get an answer to your question ️ Identify the following as revenue expenditure and capital expenditure. 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. Each question has 4 answers from which you need to choose the correct one. 52. D) purchase of furniture. Stationery, supplies, merchandise. 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 . A. Wages for construction of building. Wages and Salaries Machine Maintenance Purchasing raw material Factory Equipment. Purchase of goods . Expenditure incurred in the ordinary conduct and administration of business, i.e. c. Salaries and wages. They are important because of the following reasons: 1. SURVEY . Salaries and wage expenditures . The range of current production or manufacturing activities is mainly a result of past capital expenditures. Which of the following is a revenue expenditure. (v) Loan given to Union Territories. Capital Expenditure. Wages and Salaries Machine Maintenance Purchasing raw material Factory Equipment. 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? The effect of capital expenditure decisions usually extends into the future. This includes tangible and intangible assets Example acquisition of building, land, deliver van. A. Wages paid to factory workers. Recently Asked Questions Note: Billings per year are stated as percentages of the contract price. Solution for Which of the following is a capital expenditure? Click here to get an answer to your question ️ Which of the following is the capital expenditure? B. Which of the following is not capital expenditure? Still, do not forget that it`s an industry-specific ratio. Assume that a honey producer sells its annual harvest to an Internet retailer for $70,000. C. Wages paid for installation of machinery. 53. Monthly rent of a delivery truck. Which of these is NOT a list of revenue expenditure? A. Tags: Question 4 . It comprises of the costs incurred for the purchase of different fixed assets. Capital outlay b. a. 3. 30 seconds . Answered By . When an economy is experiencing higher real interest rates, business firms will most likely be discouraged from investing in: tangible and/or intangible capital. 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. Q. Which of the following is a Revenue Expenditure? Next Question. Options. This preview shows page 15 - 28 out of 34 pages. Purchase of Furniture Repairs to Machinery Extension of Office Installation of Equipment. a)wages paid for repair of building b)wages paid for white… 2. Grewal's Accountancy Test Paper 1. D. Small expenditures to acquire long-lived assets, such as $13 to purchase a wastebasket. School Universiti Teknologi Mara; Course Title ACCOUNTING ACC406; Uploaded By hyokaz9. 1,000 is spent on its repairs, Rs. Analyze the current market position of WAPDA by using Bottom Up Approach and Top Down Approach. 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. c. cost of… (i) Subsidies, (ii) Grants, (iii) Repayment of loan, and (iv) Construction of school building. Renovation of office space. Get Answer. Salaries and wages. Which of the following is not a capital expenditure? Assembly b. Following are the examples of revenue expenditure. Expenditure incurred to acquire fixed assets for the company. The correct answer is D. Related: Practice and Prepare For Your Upcoming Exams; Previous Question . Which of the following is a capital expenditure? This Multiple Choice Questions (MCQs) quiz for Chapter Capital and revenue expenditures consists of 15 questions. The following are illustrative examples of capital expenditures. The following are capital expenditures EXCEPT the ... answer choices . 10,000, the amount of Rs. Capital expenditure (CapEx) is a payment for goods or services recorded—or capitalized—on the balance sheet instead of expensed on the income statement. Which of the following is capital expenditure? Prev Question Next Question. The following are capital expenditures EXCEPT the ... answer choices . These expenditures are 'non-recurring' by nature. 30 seconds . C. Research and development costs. Salaries and wages expenditures c. Debt service expenditures d. Prepayments for insurance premiums. D. Rent of a factory. Sales tax paid in conjunction with the purchase of office equipment. Wages paid for repair of building. Giving reasons categorise the following into revenue expenditure and capital expenditure. D. Rent of a factory. Repair expenses Cost of extension to building Depreciation of machinery Electricity expenses Installation of an air conditioning system. (i) Salary paid to Army officers. (i) Store fixtures bought (ii) Wages of shop assistants (iii) The purchase of a new van (iv) Petrol for van . WAGES AND SALARIES: The amount spent as wages and salaries generally taken as a revenue expenses. Top Answer (i) Store fixtures bought (iii) The purchase of a new van . D. Both (a) and (b) Answer. Renovation of office space. answer choices . a. 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. Answer. b. Consumer expenditures make up 71% of total expenditures while wages account for 59% of total income. Payment for Machinery. Purchase of a Goodwill is _____. 5 years. Uploaded by: Madhuramohan. 60 Qs. 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. B. Stationery, supplies, merchandise. Q. 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. Identify between capital and revenue expenditure the … The addition of a building wing B. Get Answer. (iii) Repayment of Loan taken from World Bank. C. Payment for Salary. answer choices . 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. Which of the following are Capital Expenditure? A) salaries and wages. C. Wages paid for installation of machinery. Which of the following is not a common type of governmental fund expenditure? 21.Which of the following is capital expenditure? Assume a governmental entity enter into a capital lease for the purchase of seven new public safety vehicles. Question Which of the following is a capital expenditure? Fire insurance on a building . The retailer, in turn, brings in $105,000 from selling the honey directly to final customers. The cash flow and capital expenditure constantly go through the business cycles of a company life. Capital expenses are not used for ordinary day-to-day operating expenses of a business. Salaries and wage expenditures c. Debt Service expenditures d. Prepayments for insurance premiums e. Items a and d only. Solution for 23Which one of the following is capital expenditure? Capital expenditures can be contrasted with operational expenditures, or opex, that are immediately expensed. Similarly, the current decisions on capital expenditure will have a major influence on the future activities of the company. A second hand car is purchased for Rs. View Answer. B. Which of the following expenditures is of capital nature? Select one: a. repairs to motor vehicles. Practice important Questions. Insurance premium on a building . It`s important for the company to know how to use the cash flow. Long-term Effects. From which you need to choose the correct answer is d. Related: and... Expenses Cost of an asset Rs.23,000 has been taken as an turn, brings in $ 105,000 selling! 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