Which of the following is NOT regarded as a revenue expenditure?
Expenses incurred in connection with obtaining a license for starting a factory.
The correct answer is option 2. Expenses incurred in connection with obtaining a license for starting a factory are considered capital expenditures, not revenue expenditures. These costs are related to establishing the business and are capitalized. Revenue expenditures are day-to-day operational costs, such as legal fees for lawsuits (option 1), removal of stock (option 3), and maintenance costs for an engine (option 4), which are necessary for the normal functioning of the business.
Important Questions from Assets & Liabilities
The freight and insurance paid for acquiring goods or for making them saleable is ________.
Which of the following is NOT regarded as a capital expenditure?
Which concept enables the accountant to carry forward the values of assets and liabilities from one accounting period to the other without asking the question about usefulness and worth of the assets and recoverability of the receivables?
Which one of the following is a revenue expenditure?
A trade mark is an example of ______.
