Accounting Process-Books of Accounts - Capital and Revenue Expenditures (CA Foundation Principles of Accounting): Questions 5 - 11 of 12

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Question number: 5

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

Essay Question▾

Describe in Detail

What is the difference between a capital expenditure and revenue expenditure?

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Question number: 6

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

Short Answer Question▾

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How is replacement of fixed assets treated?

Question number: 7

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

Short Answer Question▾

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In what cases can an expenditure of revenue nature be treated as of capital nature?

Question number: 8

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

Essay Question▾

Describe in Detail

What is deferred revenue expenditure? Give example

Explanation

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Question number: 9

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

Essay Question▾

Describe in Detail

Can we state deferred revenue expenditure and prepaid expenses as one and the same. Justify your answer

Explanation

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Question number: 10

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

Short Answer Question▾

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Classify the following transactions as Capital, revenue or deferred revenue expenditures. And justify your answer:

  1. Carriage of Rs. 750 spent on a Xerox machine purchased and installed.

  2. Advertising expenses of Rs. 200000 spent on launching a new brand of the company’s product.

  3. Car servicing charges of Rs. 2500

  4. Construction of a parking lot at the factory premises for Rs. 31, 00, 000

Question number: 11

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

Short Answer Question▾

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State with reasons weather the following are capital or revenue in nature

  1. Overhauling expenses for second hand machinery purchased for use in business.

  2. Amount written off from the cost of fixed asset.

  3. Legal fees paid in connection with purchase of land

  4. Money paid to BSNL as security for installation of telephone lines in office premises

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