Accounting Process-Books of Accounts - Capital and Revenue Expenditures (CA Foundation Principles of Accounting): Questions 1 - 4 of 12

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Question number: 1

» Accounting Process » Books of Accounts - Capital and Revenue Expenditures

Essay Question▾

Describe in Detail

Classify the following expenses incurred by Moon ltd in shifting its factory premises into Capital, Revenue and deferred revenue, justifying your classification

  1. Rs. 30000 was spent on dismantling, removing and re installing the machinery

  2. The movement of stock from the old premises to new premises was Rs. 2500

  3. A machinery in the books was valued at Rs. 37500, was inclusive of a machine of book value of Rs. 8500. the same was sold of Rs. 2250 and was replaced by a new machine costing Rs. 12000

  4. The freight for the new machine was Rs. 750 and installation charges was Rs. 1375

  5. The furniture was valued in the books at Rs. 3750. one of the fixtures having a book value of Rs. 750 was discarded at Rs. 800 and replaced with a new one costing Rs. 2100

  6. The painting charges of factory was Rs. 550

Explanation

All the expenses incurred by Moon Ltd in shifting its factory premises can be classified as follows due to the following reasons

  1. The cost of dismantling, removing and re installing will be treated as deferred revenue expenditure, as it has not given rise to the existence of any new asset.… (147 more words) …

Question number: 2

» Accounting Process » Books of Accounts - Capital and Revenue Expenditures

Short Answer Question▾

Write in Short

How will you classify the following expenses?

  1. Inauguration expenses incurred in the opening of a new showroom

  2. Voluntary retirement compensation paid to workers

  3. Foreign travel expenses in connection with purchase of machinery

  4. Lawyer’s fees paid to defend a case relating to the ownership of land

Question number: 3

» Accounting Process » Books of Accounts - Capital and Revenue Expenditures

Short Answer Question▾

Write in Short

What is meant by the term revenue expenditure? Give a suitable example

Question number: 4

» Accounting Process » Books of Accounts - Capital and Revenue Expenditures

Short Answer Question▾

Write in Short

What are capital and revenue losses? Explain?

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