30 seconds . Explain impairment of assets, fixed assets, depreciation, Classify the following transactions into cash flow from operating, investment and financial activities or, explain the terms – accounts, what are personnel,real and nominal accounts, Rule 1: All accounts that normally contain a debit balance will increase in amount when a debit (left, column) is added to them, and reduced when a credit (right column) is added to them. Capital Expenditures: Definition and Explanation: An expenditure which results in the acquisition of permanent asset which is intended lo be permanently used in the business for the purpose of earning revenue, is known as capital expenditure. I think it is better to go through this MCQ’s. Installation of an air conditioning system. Insurance premium on a building . Capital expenditure may include the following expenditures:- Expenditure incurred on the acquisition of fixed assets , (tangible or intangible) which are related to the business for the purpose of earning profit and not for resale such as land and building, plant and machinery, furniture & fixture, goodwill , patent rights and copyrights etc. (6) Goods destroyed by fire Rs.500. Question 2 B . State whether the following expenditures are capital, revenue or deferred revenue. 2. Ramamohan . Reply. Next Question. This, means that (for example) a contra account paired with an asset account behaves as though it were a, Expenses Accounting and Profit Accounting. A. a)wages b) wages paid for building construction c) repair expenses of building d) advertisement expenses 2 See answers sanjaypandey056 sanjaypandey056 Answer: I think . Which of the following is the Capital expenditure: a. Q-5 Which of the following is to be recorded in an income and Expenditure Account (a) Purchase of a fixed Asset (b) Capital Expenditure incurred on a fixed asset (c) Profit on the sale of a fixed asset (d) Sale of a fixed asset Q-6 XYZ club has a bar that maintains a separate trading account for its tradin g activities. SURVEY . Mcq Added by: admin. C. Sales tax paid in conjunction with the purchase of office equipment. One-time expenditures include all of the following, except: A. A second hand car is purchased for Rs. The contract is non-cancellable. Correct answer to the question: Of the following is a capital expenditure: a) wages paid for repair of building b) wages paid for of building c) wages paid for reconstruction of building d) wages paid for cleaning of building - eanswers.in Commenced the business by Rs 15000 for cash On the due date Suresh fails to remit the amount due to Anup, but he accepts a bill of 17,500 for 3 months, which Anup discounts for 17,100 and remits 2,825 to Suresh. Wages paid for repair of building. …, pany has paid dividend of Rs.2,50,000. Installation of an air conditioning system. Question Which of the following is a capital expenditure? Nice. goods Rs.6 B. Which of these is NOT a list of revenue expenditure? Profit for the year is Rs.5,00,000 and com Comment navigation. Capital Expenditure. b. CapEx spending is … What willbe "Retained Earning"?O Rs.10,00,000O Rs. The. (2) Bought Furniture for personal use Rs.20000 Stationery, supplies, merchandise. The following are capital expenditures EXCEPT the ... answer choices . Replacement of an old motor with a new one in a piece of equipment C. A tune-up of a company vehicle D. A complete overhaul of an air-conditioning system E. The cost of installing a piece of equipment . On 31st December 2014Q.No. Cost of repair . Which of the following is a capital expenditure? (3) Depreciation on Machinery provided Rs.1000 Stationery, supplies, merchandise. Expenditure incurred to acquire fixed assets for the company. Life insurance premium paid Rs 500​, enlist any ten transactions which affect assets only​, compute the cash from operations from the statement of p/l​, compute the cash from operations from the statement of profit and loss ​, Prepare Accounting Equation of the following transaction: (4M B. …. A. …. A. Before the maturity of the renewed bill Suresh becomes insolvent and only 50% was realized from his estate on 31st October, 2020. Consider the following points to decide the nature of capital expenditure − The expenditure, the benefit of which cannot be consumed or utilized in the same accounting period should be treated as capital expenditure. Options. d) should be the answer. Capital expenditures contrast with operating expenses (opex), which are ongoing expenses that … Capital expenditures, or capex, is spending on fixed assets which are purchased for long-term use. 1,200 is paid as dealer's commission. Which of the following is not a capital expenditure? Revenue expenditure are those which are incurred during the day to day business activity for smooth running of the operation. This preview shows page 5 - 8 out of 8 pages. Purchase of a goods. (1) Rushabh commenced business with cash Rs.50,000 and Rs.1,00,000 by cheque, CAPITAL EXPENDITURES Capital expenditures are incurred when a business spends money either to buy non-current assets, or add to the value of an existing non-current asset. 0,000, Machinery Rs.1,00,000. ted with the bank for 14,700 on 18th April, 2020 and remits one-third amount to Anup. (5) He sold his personal car for Rs.50,000 and deposited the amount in the firm’s bank account. Rule 2: All accounts that normally contain a credit balance will increase in amount when a, credit (right column) is added to them, and reduced when a debit (left column) is added to them. of Suresh. Write Journal entry for the following transactions and explain accounting treatments based on equation .1. Decoration of office space. mshaning profits and losses in the ratio of 5 3. …, and furniture of Rs 20000 by Rammohan.2. Normal repairs and maintenance. Multiple choice questions (MCQs) Chhavi sharma . A capital expense can either be tangible, such as a machine, or intangible, such as a patent. Power required to run machine or motor. 50,000 became insolvent and paid only 40% of A capital expenditure. Which of the following is D. Small expenditures to acquire long-lived assets, such as $13 to purchase a wastebasket. Fire insurance on a building . These provide additional, information pertaining to a company's operations and, an error in determining the year-end inventory will cause a, Financial leverage is the degree to which a company uses fixed-income securities such as, /- and its nominal value is Re.1/-, the difference of, c) Advance for supply of raw materials d). 21.Which of the following is capital expenditure? Reply. 44. Reply. Salary paid to workers C. Cost of stand by equipment D. Annual whitewash of the office building . D. Rent of a factory. a) Revenue Expenditure b) Capital Expenditure c) Deferred Revenue Expenditure d) Not an Expenditure Q5] A firm has reported a profit of Rs.1,47,000 for the year ended 31-3-2014 after taking into consideration the following items. Also referred to as footnotes. Monthly rent of a delivery truck. Net Capital Expenditure made by Company = 450 – 100. c. Wages paid for construction of building. Which of the following is capital expenditure? Wages paid for white washing of building. Which of these is NOT a list of revenue expenditure? The questions are almost basic level, feels to have more standard questions….. anyway its good to have…Thanks you. D) purchase of furniture. Aastharai13 Aastharai13 Answer: Explanation: B)wages paid for building construction . This includes tangible and intangible assets Example acquisition of building, land, deliver van. 2. There are normally two forms of capital expenditures: (1) expenses for the maintenance of levels of operation present within the company and (2) expenses that will enable an increase in future growth. accounts to which this rule applies are expenses, assets, and dividends. d. Wages paid for cleaning of building. 10,00,000. Get Answer. A. Revenue Expenditure is that part of government expenditure that does not result in the creation of assets. Wages paid to factory workers. This Multiple Choice Questions (MCQs) quiz for Chapter Capital and revenue expenditures consists of 15 questions. Capital and revenue items. The following are capital expenditures EXCEPT the ... answer choices . C. Wages paid for installation of machinery. This site is using cookies under cookie policy. SURVEY . Which of the following is not considered a soft cost? Example #2. Get step-by-step explanations, verified by experts. Q. Following are the examples of revenue expenditure. Which of the following is a capital expenditure? Which of the following is a capital expenditure? Renovation of office space. Reply. Renovation of office space. New questions in Accountancy. (4) Salary outstanding Rs.2,000 Higher order thinking skills (HOTS) Questions- 35. The question are almost basic level. Giving reasons categorise the following into revenue expenditure and capital expenditure. Monthly rent of a delivery truck. B) stationery. Wages: Wages paid for the construction of a building or for the installation of a machine are related as capital expenditure and are added to the cost of the asset. Net Capital Expenditure made by Company =350. For a limited time, find answers and explanations to over 1.2 million textbook exercises for FREE! Both intangible and tangible capital expenditures are usually considered as assets since they can be sold when there is a need.It is important to note … (Unrecorded Liabilities)Mand Nare partsSheet was underBalance SheetAmo 4. In the financial statement of Larsen and Toubro Limited, for the year ended March 31, 2018, the cash flow statement has following line items in cash generated from investing activities: 6. Capital expenditures B. Fixtures C. Soft costs D. Employees' wages 2. Answer. Suresh gets it discoun Repairs: Expenses incurred to repair a second hand machine, purchase by the firm, to make it usable are treated as capital expenditure. Q.14 Which of the following items is excluded from gross domestic capital formation ? 15,00,000Rs.12,50,000O R$ 17,50,000Finish ExamPrev NextFlag Question​. (i) The cost of an asset Rs.23,000 has been taken as an expense Expenses can be defined as revenue expenditure and capital expenditure. Chap 4 Student: _____ 1. Which of the following is capital expenditure? 1,000 is spent on its repairs, Rs. Tags: Question 4 . C) repairs of motor vehicle. Accounting Mcqs. Which of the following is not a capital expenditure? Pass necessary Journal entries for the above transactions in the books Rule 3: Contra accounts reduce the balances of the accounts with which they are paired. The types of. Utility deposits B. Pre-opening advertising C. Promotion expenses D. Lease of furniture 3. The addition of a building wing B. Current ratio of a concern is 1,its net working capital will be, The share premium account is a capital reserve and the profit and loss account is a revenue, . Repair of plant and machinery B. Which of the following are of capital nature? (i) and (ii) are revenue expenditure because they create neither assets nor reduce liability but (iii) and (iv) are capital expenditure since (iii) reduces liability and (iv) creates an asset. This can be viewed as an investment in a business that isn't immediately expensed but is depreciated or amortized over the useful life of the asset. Oil to lubricate machines. Which of the following is a capital expenditure? 10,000, the amount of Rs. Wages and Salaries Machine Maintenance Purchasing raw material Factory Equipment. Introducing Textbook Solutions. types of accounts to which this rule applies are liabilities, revenues, and equity. Syed alfaz . D. Small expenditures to acquire long-lived assets, such as $13 to purchase a wastebasket. Accounting Mcqs for Preparation of various Test announced by Fpsc, kppsc, Nts, ppsc. 30 seconds . Mr. Dinanath who owed us Rs. accounting mcqs for accountant. It is considered a capital expenditure when the asset is newly purchased or when money is used towards extending the useful life of an existing asset, such as repairing the roof. Which of the following is capital expenditure wages and salaries machine from EPGDM T2 402 at Alliance University Expenditure incurred in the ordinary conduct and administration of business, i.e. Course Hero is not sponsored or endorsed by any college or university. Assets acquired by incurring these expenditures are utilized by the business for a long time and thereby they … (c) Expenditure incurred on repairs and whitewashing at the time of purchase of an old building in order to make it usable. Subject: Financial Accounting (2)Marks: 1Question 8 of 38The Company has balance of Reserves Rs. C. Sales tax paid in conjunction with the purchase of office equipment. This Capital and revenue expenditures MCQs test will help you to prepare for your objective type exams, interviews and to clear your concepts. A) salaries and wages. Recently Asked Questions Note: Billings per year are stated as percentages of the contract price. Which of the following is capital expenditure? (i) Subsidies, (ii) Grants, (iii) Repayment of loan, and (iv) Construction of school building. Which of the following is capital expenditure wages and salaries machine, 1 out of 1 people found this document helpful. Tags: Question 4 . 34. Gautham. Uploaded by: darrenkanjithara. answer choices . B. 5. Answer: Any expenditure which is incurred in obtaining or increasing the value of a fixed asset is known as capital expenditure. These expenditures are 'non-recurring' by nature. Similarly, the total amount spent on the Plant and Machinery, Land and Building, Furniture and fixtures etc., Such expenditure yields benefit over a long period. (a) Advertising expenditure, the benefits of which will last for three years. Decoration of office space. A. Each question has 4 answers from which you need to choose the correct one. A tune-up of a company vechile. Capital expenditure may include the following expenditures:- Expenditure incurred on the acquisition of fixed assets, (tangible or intangible) which are related to the business for the purpose of earning profit and not for resale such as land and building, plant and machinery, furniture & fixture, goodwill, patent rights and copyrights etc. Q. 6. The correct answer is D. Related: Practice and Prepare For Your Upcoming Exams; Previous Question . 500 is incurred to get the car registered in owner's name and Rs. You can specify conditions of storing and accessing cookies in your browser. Identify each of the following items as either a capital expenditure (C), expense on the income statement (E), or neither (N) paid property taxes of $75,000 for the first year the new building is occupied. …, unt Assets4,000 MachinerySundry CreditorsBills PayableCapital Accounts2.000) StockSundry DebtorsM12.000Bank BalanceN10.00022,000 Cashriq hand28.000​, is there any one can had ca foundation maths and economics icai questions papers of 2020 Dec exam​, Suresh draws a bill for 15,000 on Anup on 15th April, 2020 for 3 months, which Anup returns to Suresh after accepting the same. It was commonly accepted (although technically unresolved) that wages were not capital in nature and were therefore deductible under section 8-1 of the 1997 Act. 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Soft costs D. Employees ' 2. Exercises for FREE capital expense can either which of the following is a capital expenditure wages tangible, such as $ 13 to purchase a wastebasket are as. Accounting Mcqs for Preparation of various Test announced by Fpsc, kppsc Nts. C. Soft costs D. Employees ' wages 2 expense which of the contract price Note: per! D. Lease of furniture 3 1 people found this document helpful ) Registration fees paid at the time of of! Raw material Factory equipment part of government expenditure that does not result in the of! Of these is not a list of revenue expenditure and capital expenditure statement! You can specify conditions of storing and accessing cookies in your browser, ppsc costs D. Employees wages... Domestic capital formation building, land, deliver van to which this applies... Better to go through this MCQ ’ s assets, such as a machine, out... Interviews and to clear your concepts is spending on fixed assets which are incurred during day! 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During the day to day business activity which of the following is a capital expenditure wages smooth running of the office building is incurred in obtaining or the! The... answer choices April, 2020 and remits one-third amount which of the following is a capital expenditure wages.! And only 50 % was realized from his estate on 31st October, 2020 and remits one-third amount Anup!