InterviewSolution
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InterviewSolution
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State whether the following expenditure is revenue or capital. Give reasons for your answers.1. The advertising expenditure, the benefit of which will last for 5 years. 2. Registration fee paid at the time of purchase of a building. |
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Answer» 1. Revenue Expenditure / Deferred Revenue Expenditure: Advertising expenditure is not written off completily to the profit and loss account of the accounting year during which it is incurred. It is spread over a number of years whose benet is likely to be received. 2. Capital Expenditure: Any amount spent on acquistion of an asset or for increasing the nature of an asset is called capital expenditure. Registration fee paid is a capital expenditure. |
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