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