Chapter 9 - Accounting For Capital Transactions

Question 1

What do capital transactions concern ?

Answer 1

Capital transactions concern all aspects of non-current assets through purchasing control and final disposal

Question 2

Are non-current assets usually tangible or intangible ?

Answer 2

Non-current assets are usually tangible items

Question 3

What are examples of non-current assets ?

Answer 3

• Land
• Premises
• Vehicles
• Machinery

Question 4

What is capital expenditure?

Answer 4

Capital expenditure is expenditure incurred on the purchase, alteration or improve improvement of noncurrent assets

Question 5

What accounting principle is capital expenditure always subject to ?

Answer 5

The materiality principle

Question 6

What is revenue expenditure ?

Answer 6

Revenue expenditure is expenditure incurred on running expenses.

Question 7

What’s our examples of running expenses ?

Answer 7

Repair, maintenance and servicing of noncurrent assets

Administration and general overheads of the business

Selling and distributing the goods or products in which the business trades

Question 8

Is capital or revenue expenditure shown on the statement of
financial position ?

Answer 8

Capital expenditure is shown on the statement of financial position

Question 9

Is capital or revenue expenditure shown on the statement of profit or loss ?

Answer 9

Revenue expenditure is shown on the statement of profit or loss

Question 11

Delivery of non-current assets, installation of non-current assets, improvement of non-current assets and legal cost of buying property are all included in ?

Answer 11

Capital expenditure