MABS Institution
11th Accountancy Weekly Test - 1 ( Capital and Revenue transactions )-Aug 2020
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Any two examples of deferred revenue expenditure.
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State with reasons whether the following are capital or revenue expenditure:
i. Expenses incurred in connection with obtaining a licence for starting the factory for Rs.25,000.
ii. A factory shed was constructed at a cost of Rs.2,00,000. A sum of Rs.10,000 had been incurred in the construction of temporary huts for storing building material.
iii. Overhaul expenses of second-hand machinery purchased amounted to Rs.5,000. -
Write any three examples of revenue expenditure.
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Distinguish between capital expenditure and revenue expenditure.
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What is deferred revenue expenditure? Give two examples.
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What are the classifications of expenditures?
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Distinguish between capital receipt and revenue receipt.
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Classify the following into capital and revenue.
i) Rs.560 spent on replacement of a worn our part of plant.
ii) Rs.1,500 spent on complete overhauling of a second hand machinery just bought.
iii) Carriage expenses Rs.230.
iv) Profit on sale of asset Rs.700
v) Rs.150 loss on sale of furniture. -
Classify the following items into capital and revenue.
i) Rs.50,000 spent for railway siding.
ii) Loss on sale of old furniture.
iii) Carriage paid on goods sold. -
Classify the following receipts into capital and revenue.
i) Sale proceeds of goods Rs.75,000.
ii) Loan borrowed from bank Rs.2,50,000
iii) Sale of investment Rs.1,20,000.
iv) Commission received Rs.30,000.
v) Rs.1,400 wages paid in connection with the erection of new machinery. -
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Explain the basic considerations in determining the difference between capital and revenue expenditure.
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State whether they are capital and revenue.
i) Construction of building Rs.10,00,000.
ii) Repairs to furniture Rs.50,000.
iii) White-washing the building Rs.80,000
iv) Pulling down the old building and rebuilding Rs.4,00,000
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