Capital Expenditures & Revenue Expenditures – 35 Easy MCQs

Capital Expenditures & Revenue Expenditures

Here are the 35 Solved MCQs of Capital Expenditures & Revenue Expenditures of Commerce. These MCQs develop your concept and help to improvise your exams preparation.

1-35 MCQs – Capital Expenditures & Revenue Expenditures

  1. Outstanding Rent is classified as
    1. Revenue Expenditures
    2. Capital Expenditures
    3. Deferred Revenue Expenditure
    4. None of these
  2. Amount spent on increasing the seating capacity in a classroom is a
    1. Capital Expenditure
    2. Revenue Expenditure
    3. Normal Expenditure
    4. All of these
  3. Expenditure incurred by a publisher for acquiring copyrights is a
    1. Revenue Expenditures
    2. Deferred Tax Expense
    3. Capital Expenditure
    4. None of these
  4. When a company conduct research and development, the expenditure incurred on it is termed as
    1. Deferred Tax Expenditure
    2. Revenue Expenditures
    3. Capital Expenditure
    4. Normal Expenditure
  5. Share Premium is a
    1. Capital Loss
    2. Revenue Receipt
    3. Capital Receipt
    4. Revenue Loss
  6. Loss caused by theft of cash by cashier during business hours is a loss of
    1. Capital Nature
    2. Revenue Nature
    3. Extreme Nature
    4. All of these
  7. Loss of cash by theft committed by cashier after business hours is a
    1. Capital Loss
    2. Revenue Loss
    3. Deferred Revenue Loss
    4. Revenue & Deferred Revenue Loss
  8. An expenditure is classified as Capital Expenditure when
    1. it benefits only in the current year
    2. it is shown in the balance sheet
    3. the amount is large
    4. it is to benefit a number of future years
  9. Which one of the following is of revenue nature?
    1. cost of painting the old building
    2. cost of purchase of new machinery
    3. cost of acquired land
    4. none of these
  10. Charging of capital expenditure to revenue results in
    1. Capital Reserve
    2. Secret Reserve
    3. Revenue Reserve
    4. Open Reserve
  11. Amount spend on unsuccessful patents right is a
    1. Capital Expenditure
    2. Deferred Revenue Expenditure
    3. Revenue Expenditures
    4. None of these
  12. The renewal fee for the patents is a
    1. Development Expenditure
    2. Capital Expenditure
    3. Revenue Expenditures
    4. Deferred Revenue Expenditure
  13. Which of the following is Capital Expenditure?
    1. Purchase of Delivery Van
    2. Cost of Advertisement
    3. Purchase of Machine Oil
    4. Purchase of Spare Parts
  14. Which one of the following is Revenue Expenditure?
    1. Purchase of Land
    2. Purchase of Machinery
    3. Purchase of Raw Material
    4. Purchase of Office Computers
  15. All of the following are revenue expenditures except
    1. Purchase of Spare Parts
    2. Cost of Advertisement
    3. Purchase of Machine Oil
    4. Extension of Building
  16. General Manager attended a meeting held abroad to develop the market; the meeting was successful. This expense is like
    1. Deferred Revenue Expenditure
    2. Capital Expenditure
    3. Revenue Expenditures
    4. None of these
  17. The rings and pistons of an engine were changed at the cost of Rs. 5,000 to increase fuel efficiency is:
    1. Capital Expenditure
    2. Revenue Expenditures
    3. Deferred Revenue Expenditure
    4. None of these
  18. Expenses incurred to retain the title of a building is a:
    1. Revenue Expenditures
    2. Capital Expenditure
    3. Deferred Revenue Expenditure
    4. None of these
  19. An old machine was purchased for Rs. 60,000. It was repaired for Rs. 5,000 and Rs. 5,000 paid on its installation. Machinery repairs a/c will be debited by:
    1. Rs. 5,000/-
    2. Rs. 10,000/-
    3. Rs. 15,000/-
    4. None of these
  20. Rs.40,000 was spent by a factory in overhauling its existing plant & machinery. It has enhanced its working life by five years. The aforesaid expenditure is
    1. Revenue Expenditures
    2. Capital Expenditure
    3. Deferred Revenue Expenditure
    4. None of these
  21. An old piece of furniture was purchased for Rs.10,000.It was repaired for Rs.100.The repairs account should be debited by:
    1. Rs. 10,000/-
    2. Rs. 100/-
    3. Rs. 10,010/-
    4. Nil
  22. Rs. 25,000 incurred on structural alterations to existing asset whereby its revenue earning capacity is increased is:
    1. Capital Expenditure
    2. Deferred Revenue Expenditure
    3. Revenue Expenditures
    4. None of the above
  23. Capital expenditure provides
    1. short period benefits
    2. long period benefits
    3. very long period benefits
    4. none of the above
  24. The basic consideration(s) in the distinction between capital and revenue expenditures is/are:
    1. nature of business
    2. effect on revenue generating capacity of business
    3. purpose of expenses
    4. all of the above
  25. Dismantling and demolition charges is a
    1. Capital Expenditure
    2. Revenue Expenditures
    3. Deferred Revenue Expenditure
    4. None of the above
  26. Material costing Rs.700 in the erection of the machinery and the wages paid for it amounting to Rs. 400 should be debited to:
    1. Material Account
    2. Wages Account
    3. Machinery Account
    4. Purchases Account
  27. Interest on capital for the business is
    1. Revenue
    2. Expense
    3. Gain
    4. None of the above
  28. Cost of exceptional repairs of a non-recurring nature by way of overhauling of the entire plant is:
    1. Capital Expenditure
    2. Revenue Expenditures
    3. Deferred Revenue Expenditure
    4. None of the above
  29. Amount spent on “Structural alterations” under the pressure of law is a
    1. Capital Expenditure
    2. Revenue Expenditures
    3. Deferred Revenue Expenditure
    4. None of the above
  30. Rs. 5,000 spent on repairs of a newly purchased old motor car is debited to:
    1. Repairs Account
    2. General Expenses Account
    3. Motor Car Account
    4. None of the above
  31. An expenditure, incurred to improve the position of the business is known as
    1. Deferred expenditure
    2. Recurring expenditure
    3. Capital expenditure
    4. Revenue expenditure
  32. A revenue expenditure, the benefit of which is not confined to one accounting year is called
    1. Non-current Expenditure
    2. Revenue Expenditure
    3. Future Expenditure
    4. Deferred Revenue Expenditure
  33. An expenditure, which increases the utility or productive capacity of an asset is treated as
    1. Revenue Expenditure
    2. Capital Expenditure
    3. Deferred Expenditure
    4. None of these
  34. Expenditure, which helps to maintain business efficiency is called
    1. Revenue Expenditures
    2. Capital Expenditure
    3. Deferred Revenue Expenditure
    4. None of the above
  35. An expenditure, which is completely exhausted within the current accounting period is known as
    1. Deferred Expenditure
    2. Revenue Expenditures
    3. Capital Expenditure
    4. None of the above
2

Capital & Revenue Expenditures

Quiz with Answers

1 / 35

Outstanding Rent is classified as

2 / 35

Amount spent on increasing the seating capacity in a classroom is a

3 / 35

Expenditure incurred by a publisher for acquiring copyrights is a

4 / 35

When a company conduct research and development, the expenditure incurred on it is termed as

5 / 35

Share Premium is a

6 / 35

Loss caused by theft of cash by cashier during business hours is a loss of

7 / 35

Loss of cash by theft committed by cashier after business hours is a

8 / 35

An expenditure is classified as Capital Expenditure when

9 / 35

Which one of the following is of revenue nature?

10 / 35

Charging of capital expenditure to revenue results in

11 / 35

Amount spend on unsuccessful patents right is a

12 / 35

The renewal fee for the patents is a

13 / 35

Which of the following is Capital Expenditure?

14 / 35

Which one of the following is Revenue Expenditure?

15 / 35

All of the following are revenue expenditures except

16 / 35

General Manager attended a meeting held abroad to develop the market; the meeting was successful. This expense is like

17 / 35

The rings and pistons of an engine were changed at the cost of Rs. 5,000 to increase fuel efficiency is:

18 / 35

Expenses incurred to retain the title of a building is a:

19 / 35

An old machine was purchased for Rs. 60,000. It was repaired for Rs. 5,000 and Rs. 5,000 paid on its installation. Machinery repairs a/c will be debited by:

20 / 35

Rs.40,000 was spent by a factory in overhauling its existing plant & machinery. It has enhanced its working life by five years. The aforesaid expenditure is

21 / 35

An old piece of furniture was purchased for Rs.10,000.It was repaired for Rs.100.The repairs account should be debited by:

22 / 35

Rs. 25,000 incurred on structural alterations to existing asset whereby its revenue earning capacity is increased is:

23 / 35

Capital expenditure provides

24 / 35

The basic consideration(s) in the distinction between capital and revenue expenditures is/are:

25 / 35

Dismantling and demolition charges is a

26 / 35

Material costing Rs.700 in the erection of the machinery and the wages paid for it amounting to Rs. 400 should be debited to:

27 / 35

Interest on capital for the business is

28 / 35

Cost of exceptional repairs of a non-recurring nature by way of overhauling of the entire plant is:

29 / 35

Amount spent on “Structural alterations” under the pressure of law is a

30 / 35

Rs. 5,000 spent on repairs of a newly purchased old motor car is debited to:

31 / 35

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

32 / 35

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

33 / 35

An expenditure, which increases the utility or productive capacity of an asset is treated as

34 / 35

Expenditure, which helps to maintain business efficiency is called

35 / 35

An expenditure, which is completely exhausted within the current accounting period is known as

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