Capital and Revenue Expenditure

Select the options that correctly defines capital expenditure.

• Costs to buy and bring the non-current assets to their intended use.

• Costs to operate, repair and maintain the non-current assets in working condition.

• Costs to enhance the non-current assets

• Provides benefits for more than one year

• Recorded as expense

Which of the following is the journal entry of revenue expenditure?

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Raj runs a fruit juice stall.

Decide whether the following should be classified as capital expenditure or revenue expenditure.

Purchase of blenders

• Capital expenditure

• Revenue expenditure

Raj runs a fruit juice stall.

Decide whether the following should be classified as capital expenditure or revenue expenditure.

Fire insurance of the stall

• Capital expenditure

• Revenue expenditure

Raj runs a fruit juice stall.

Decide whether the following should be classified as capital expenditure or revenue expenditure.

Salary of worker

• Capital expenditure

• Revenue expenditure

Raj runs a fruit juice stall.

Decide whether the following should be classified as capital expenditure or revenue expenditure.

Purchase of the business signboard

• Capital expenditure

• Revenue expenditure

Raj runs a fruit juice stall.

Decide whether the following should be classified as capital expenditure or revenue expenditure.

Replacement of the blades in the blenders

• Capital expenditure

• Revenue expenditure

Raj runs a fruit juice stall.

Decide whether the following should be classified as capital expenditure or revenue expenditure.

Electricity charges to operate the blenders

• Capital expenditure

• Revenue expenditure

Amy ordered an air-conditioning system from Gain City for the office.

Select any of the following that is part of the cost of the air-conditioner.

• Purchase price of the air-conditioner

• Installation cost of the air-conditioner

• Deliveryman's salary

• Delivery charges for transporting the air-conditioner

• Utility charges for using the air-conditioner

Amy ordered an air-conditioning system from Gain City for the office.

Calculate the cost of the air-conditioning system.

Purchase price of the air-conditioner: $4 090

Installation cost of the air-conditioner: $120

Deliveryman's salary: $800

Delivery charges for transporting the air-conditioner: $60

Utility charges to operate the air-conditioner: $123