Capital expenditure or capital expense (capex or CAPEX) is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. C. Wages paid for installation of machinery. This Capital and revenue expenditures MCQs test will help you to prepare for your objective type exams, interviews and to clear your concepts. Capital expenditure may include the following expenditures:-Expenditure incurred on the acquisition of fixed assets, ... All expenses incurred in the ordinary conduct of business, such as rent, salaries, wages, manufacturing expenses, carriage, commission, legal charges, insurance and advertisement, free samples, salaries, postage expenses etc. Decoration of office space. D. Rent of a factory. Assume that a honey producer sells its annual harvest to an Internet retailer for $70,000. Land Land is a special type of capital expenditure as its value doesn't typically deprecate because it generally doesn't go down in value. Repair expenses Cost of extension to building Depreciation of machinery Electricity expenses Give reasons. 3. Testing for use c. Uninsured theft d. Sale tax e. None… Following are the examples of revenue expenditure. (iv) Grants given by central government to state Government. Which of the following is not capital expenditure? Prev Question Next Question. Salaries and wage expenditures . Fire insurance on a building . b. The following are capital expenditures EXCEPT the ... answer choices . Payment for Machinery. Which of the following expenditures is of capital nature? State with reasons whether the following are capital or revenue expenditures: (i) A new machine is purchased for ₹ 60,000, ₹ 800 were spent on its carriage and ₹ 1,500 were paid as wages for its installation. The range of current production or manufacturing activities is mainly a result of past capital expenditures. These expenditures are 'non-recurring' by nature. C) repairs of motor vehicle. c. cost of… a)wages paid for repair of building b)wages paid for white… Capital expenses are not used for ordinary day-to-day operating expenses of a business. B. Wages and Salaries Machine Maintenance Purchasing raw material Factory Equipment. Capital Expenses or Expenditures are payments by a business for fixed assets, like buildings and equipment. A. 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. Pages 34. D) purchase of furniture. Giving reasons categorise the following into revenue expenditure and capital expenditure. Which of the following is not a common type of governmental fund expenditure? Which of these is NOT a list of revenue expenditure? 53. A. excess supply. The addition of a building wing B. Capital outlay b. Expenditure incurred to acquire fixed assets for the company. Which of the following is a capital expenditure: a) Wages paid for repair of building b) Wages paid for white washing of building c) Wages paid for reconstruction of building d) Wages paid for cleaning of building 2 See answers RehbarKhan RehbarKhan Answer: Here is your answer. (i) Subsidies, (ii) Grants, (iii) Repayment of loan, and (iv) Construction of school building. Grewal's Accountancy Test Paper 1. Recently Asked Questions Q 4. View Answer. answer choices . answer choices . Wages paid for white washing of building . 30 seconds . Solution for Which of the following is a capital expenditure? Practice important Questions. Debt service. 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. Capital Expenditure. Capital expenditures can be contrasted with operational expenditures, or opex, that are immediately expensed. (i) The cost of an asset Rs.23,000 has been taken as an expense Wages and Salaries Machine Maintenance Purchasing raw material Factory Equipment. A. Each question has 4 answers from which you need to choose the correct one. However, amount of wages and salaries paid for the erection … Cost of repairs. Which of the following is capital expenditure? Purchase of goods . SURVEY . D. Small expenditures to acquire long-lived assets, such as $13 to purchase a wastebasket. (ii) Purchase of Metro coaches from Japan. a. Stationery, supplies, merchandise. c. Salaries and wages. Salaries and wages expenditures c. Debt service expenditures d. Prepayments for insurance premiums. It`s important for the company to know how to use the cash flow. Installation of an air conditioning system. The cash flow and capital expenditure constantly go through the business cycles of a company life. Long-term Effects. Similarly, the current decisions on capital expenditure will have a major influence on the future activities of the company. A) salaries and wages. Which of the following are of capital nature? 2. Solution for 23Which one of the following is capital expenditure? Assembly b. 10,000, the amount of Rs. Identify between capital and revenue expenditure the … In cases such as mining, land is depleted of natural resources. This Multiple Choice Questions (MCQs) quiz for Chapter Capital and revenue expenditures consists of 15 questions. Cost of repair . b. goods taken by owner for own use. Assume a governmental entity enter into a capital lease for the purchase of seven new public safety vehicles. Answered By . Purchase of a goods. Installation of an air conditioning system. SURVEY . B. Wages paid to factory workers. The following are illustrative examples of capital expenditures. They are important because of the following reasons: 1. Consumer expenditures make up 71% of total expenditures while wages account for 59% of total income. Salaries and wages. This preview shows page 15 - 28 out of 34 pages. Next Question. 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. Stationery, supplies, merchandise. Q. 1,000 is spent on its repairs, Rs. B. Sales tax paid in conjunction with the purchase of office equipment. Uploaded by: darrenkanjithara. B. C. Wages paid for installation of machinery. WAGES AND SALARIES: The amount spent as wages and salaries generally taken as a revenue expenses. Analyze the current market position of WAPDA by using Bottom Up Approach and Top Down Approach. a. Which of the following is not a capital expenditure? C. Payment for Salary. Power required to run machine or motor. 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 Stop wondering, read and find out how to get a quick soft loan in Nigeria. Monthly rent of a delivery truck. Still, do not forget that it`s an industry-specific ratio. The legal life of most patents is: A. It comprises of the costs incurred for the purchase of different fixed assets. (ii) A sum of ₹ 10,000 was spent on painting the new factory. Select one: a. repairs to motor vehicles. A second hand car is purchased for Rs. Get Answer. Which of the following are Capital Expenditure? B) stationery. Related Questions to study. Assets acquired by incurring these expenditures are utilized by the business for a long time and thereby they earn revenue. Renovation of office space. Wages paid for repair of building. B. Renovation of office space. The following are capital expenditures EXCEPT the ... answer choices . 5 years. A capital expenditure. 500 is incurred to get the car registered in owner's name and Rs. Oil to lubricate machines. The effect of capital expenditure decisions usually extends into the future. Options. Get Answer. Which of the following is a capital expenditure? 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 . d. Depreciation. Answer. If a Keynesian expenditure-output model shows that aggregate demand for both goods and labor has shifted to the left to D1, while wages remained at w0 and prices remained at P0, what will be the result? (iii) ₹ 5,000 paid for the erection of a new machine. 2. Which of these is NOT a list of revenue expenditure? The greater capital expenditure for a firm, the lesscash flow it can use. The contract is non-cancellable. 60 Qs. d. Depreciation. Solution for Which of the following expenditure is not capital expenditure for equipment? D. Rent of a factory. (iii) Repayment of Loan taken from World Bank. (i) Store fixtures bought (ii) Wages of shop assistants (iii) The purchase of a new van (iv) Petrol for van . Wages for construction of building. Uploaded by: Madhuramohan. Q. This includes tangible and intangible assets Example acquisition of building, land, deliver van. Click here to get an answer to your question ️ Which of the following is the capital expenditure? Tags: Question 4 . A. Decoration of office space. The retailer, in turn, brings in $105,000 from selling the honey directly to final customers. (v) Loan given to Union Territories. 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. Tags: Question 4 . Insurance premium on a building . Expenditure incurred in the ordinary conduct and administration of business, i.e. 52. 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. Which of the following is a Revenue Expenditure? 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. Which of the following is a revenue expenditure. Question Which of the following is a capital expenditure? Which of the following is a capital expenditure? WHEN REVENUE EXPENDITURE BECOMING CAPITAL EXPENDITURE Following are some of the circumstances under which an expenditure which is usually of revenue nature may be taken as an expenditure of a capital nature: 1. Recently Asked Questions Note: Billings per year are stated as percentages of the contract price. A. 1,200 is paid as dealer's commission. (i) Salary paid to Army officers. They can be categorized into the following: Gross fixed capital. 30 seconds . C. Research and development costs. Purchase of Furniture Repairs to Machinery Extension of Office Installation of Equipment. Top Answer (i) Store fixtures bought (iii) The purchase of a new van . School Universiti Teknologi Mara; Course Title ACCOUNTING ACC406; Uploaded By hyokaz9. D. Both (a) and (b) Answer. The correct answer is D. Related: Practice and Prepare For Your Upcoming Exams; Previous Question . Salaries and wage expenditures c. Debt Service expenditures d. Prepayments for insurance premiums e. Items a and d only. A tune-up of a company vechile. b. Investments by businesses include capital expenditures Capital Expenditures Capital expenditures refer to funds that are used by a company for the purchase, improvement, or maintenance of long-term assets to improve on various assets. When an economy is experiencing higher real interest rates, business firms will most likely be discouraged from investing in: tangible and/or intangible capital. (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. 21.Which of the following is capital expenditure? Purchase of a Goodwill is _____. Capital expenditure (CapEx) is a payment for goods or services recorded—or capitalized—on the balance sheet instead of expensed on the income statement. Click hereto get an answer to your question ️ Identify the following as revenue expenditure and capital expenditure. That it ` s important for the company lease for the company to know how get. Which of the following reasons: 1 that a honey producer sells its annual harvest to an Internet for. Choice Questions ( MCQs ) quiz for Chapter capital and revenue expenditures consists of Questions... 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