Ramamohan . Posted in: Capital and revenue items (explanations) Capital and revenue expenditures are two different types of business expenditures that we often find in financial accounting and reporting. Accounting concepts & Capital and Revenue expenditure 10.1 What is meant by the 'money measurement concept? Nonetheless, these items are ultimately included as part of capital. Capital and revenue items. A debt recorded as bad in the earlier year recovered during the year is a A] Revenue receipt B] Revenue expenditure C] Capital expenditure D] Capital receipt 11. Each of these accounts fall into one of five categories. Capital expenditure is taken to the balance sheet and doesn’t affect the profit and loss for the period. Nice. Repairs and renewals are usually treated as items’of revenue charge, but if an old asset is purchased the amount spent on its immediate repair by the purchaser to put it in working order is capital expenditure. B] Revenue expenditure C] Capital expenditure D] Capital receipt 10. Syed alfaz . Failure to make distinction between capital and revenue items will result in A] under trading Expenditures 50,000 Other Financing Sources— Capital Lease Agreements 50,000 Governmental Activities: Equipment 50,000 Capital … revenue items such as rent received or commission received Capital expenditure results in the appearance of a non-current asset in the statement of financial position of the business. Lesson 4 Accounting Process – III (Capital and Revenue Items) LESSON OUTLINE LEARNING 10.3 Explain the term 'materiality' as it is used in accounting. 10.4 The historical cost convention looks backwards but the going concern convention looks forwards. PRINCIPLES OF FINANCIAL ACCOUNTING ACCOUNTING CYCLE - SERVICE - CASH There are many items that businesses keep records of. Revenue expenditure includes wage expenses, rent payments and utility expenses. 1. I think it is better to go through this MCQ’s. Multiple choice questions (MCQs) Chhavi sharma . Revenue expenditure is also known as period expenses. This is revenue charge, but freight or carriage paid on a newly purchased fixed asset is capital expenditure. Assets: Anything of value that a business owns 2. Freight and carriage. View Lesson 4.pdf from MANAGEMENT 91 at Welingkar Institute Of Management Development & Research, Mumbai. Reply. Reply. Revenue expenditure results in an expense in the statement of profit or loss. 1.1 Accounting Principles, Concepts and Conventions 1 1.2 Capital and Revenue transactions - capital and revenue expenditures, capital and 15revenue receipts 1.3 Double entry system, Books of prime entry, Subsidiary Books, Cash Book, Journal, 25Ledger, Trial Balance Income Revenues refer to the amounts earned from the company’s ordinary course of business such as professional fees or service revenue for service companies and sales for merchandising and manufacturing concerns. 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