Question # 1

Distinction between capital and revenue items is important for the preparation

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Balance sheet

Trading and profit or loss a/c

Bank reconciliation statement

Both a & b

Expenditure is a capital expenditure because

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The amount involved is heavy

It is the personal expenditure of the owner out of his capital

It is intended to benefit the future period

It is a recurring expenditure

Which one of the following is appeared in the balance sheet

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Revenue expenditure

Capital expenditure

Deferred expenditure

Both b & c

All revenue expenditure are taken to

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Trading a/c

Trading & profit or Loss a/c

Profit or loss a/c

Balance sheet

Expenditure is revenue expenditure because

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It is intended to benefit the current period

The amount involved is small

It is deducted from the gross sale proceeds

None of these

Depreciation of fixed assets used in the business is an example of

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capital expenditure

Revenue expenditure

Deferred expenditure

None of these

An expenditure, which is temporarily increase the profit making capacity of the business is called

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Deferred expenditure

Capital expenditure

Revenue expenditure

Non-recurring expenditure

A revenue expenditure, the benefit of which is not confined to one accounting year is called

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Non-current expenditure

Revenue expenditure

Future expenditure

Deferred expenditure

An expenditure, which is non-recurring and irregular is called

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Capital expenditure

Revenue expenditure

Short-term expenditure

Current expenditure

Transaction, having short-term effects are known as

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Revenue transaction

Capital transaction

Non-monetary transaction

Paper transaction

Expenditure, which helps to maintain the business efficiency is called

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Revenue expenditure

Deferred expenditure

Capital expenditure

Future expenditure

Heavy expenditure on advertisement for making a new product is a

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Revenue expenditure

Deferred expenditure

Capital loss

Non-recurring expenditure

An expenditure, incurred to improve the position of the business is known as

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Deferred expenditure

Revenue expenditure

Capital expenditure

Recurring expenditure

It is the price of goods sold or services provided by a business to its customers

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Asset

Cost

Capital

Revenue

Wages paid for the construction of building is an example of

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Revenue expenditure

Capital expenditure

Recurring expenditure

Short-term expenditure

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Principles of accounting Icom Part 1 English Medium Chapter 13 Online Test MCQs With Answers

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