Read the following about the Revenue expenditure.
A. Revenue Expenditure is expenditure incurred for purposes other than the creation of physical or financial assets of the central government.
B. It relates to those expenses incurred for the normal functioning of the government departments and various services, interest payments on debt incurred by the government, and grants given to state governments and other parties (even though some of the grants may be meant for creation of assets).
Identify the INCORRECT statement/statements.

Question

Read the following about the Revenue expenditure.

A. Revenue Expenditure is expenditure incurred for purposes other than the creation of physical or financial assets of the central government.

B. It relates to those expenses incurred for the normal functioning of the government departments and various services, interest payments on debt incurred by the government, and grants given to state governments and other parties (even though some of the grants may be meant for creation of assets).

Identify the INCORRECT statement/statements.

Prepp Team · Accepted Answer

Statement A: Revenue expenditure is spending that does not create physical or financial assets for the central government. This is the standard budget definition. Correct.

Statement B: It covers the normal running of government departments and services, interest payments on government debt and grants to state governments and others, even if some grants are used to create assets. Correct.

Since both statements are correct, neither of them is incorrect.

Hence, Neither A nor B.