Captial Revenue And Expenditure

Question 1

What is capital expenditure?

Answer 1

Expenditure on any capital item

Question 2

Give an example of capital expenditure?

Answer 2

The purchase of any non-current asset

Question 3

Where does capital expenditure go in the financial statements?

Answer 3

Statement of financial position

Question 4

What is revenue expenditure?

Answer 4

Expenditure on expenses directly related to the years trading

Question 5

Give an example of revenue expenditure?

Answer 5

Postage, heat, electricity, depreciation

Question 6

Where does revenue expenditure go in the final statements?

Answer 6

Income statement under ‘less expenses’

Question 7

It is not important to differentiate between capital and revenue expenditure in the financial statements (true or false)

Answer 7

False

Question 8

Capital expenditure and revenue expenditure both go in the statement of financial position (true or false)

Answer 8

False

Question 9

Revenue expenditure includes the cost of carriage to get a non-current asset to the business (true or false)

Answer 9

False

Question 10

Revenue expenditure reduces the profit figure (true or false)

Answer 10

True

Question 11

Capital expenditure increases the profit figure (true or false)

Answer 11

False

Question 12

Car tax is a revenue expenditure (true or false)

Answer 12

True

Question 13

Repairs to a builder’s van is revenue expenditure (true or false)

Answer 13

True

Question 14

A new factory purchase for a business is what?

Answer 14

Capital expenditure

Question 15

Revenue expenditure goes where?

Answer 15

Income statement

Question 16

Capital expenditure goes where?

Answer 16

Into the assets in the statement of financial position