Test: Capital And Revenue Expenditures And Receipts - 3


11 Questions MCQ Test Crash Course of Accountancy - Class 11 | Test: Capital And Revenue Expenditures And Receipts - 3


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Attempt Test: Capital And Revenue Expenditures And Receipts - 3 | 11 questions in 11 minutes | Mock test for CA Foundation preparation | Free important questions MCQ to study Crash Course of Accountancy - Class 11 for CA Foundation Exam | Download free PDF with solutions
QUESTION: 1

Classify the following expenditures and receipts as capital or revenue:

Q.Money spent Rs. 10,000 as traveling expenses of the directors on trips abroad for purchase of capital assets is 

Solution:
QUESTION: 2

Classify the following expenditures and receipts as capital or revenue:

Q.Amount of Rs. 5,000 spent as lawyers’ fee to defend a suit claiming that the firm’s factory site belonged to the plaintiff’s land.

Solution:
QUESTION: 3

Classify the following expenditures and receipts as capital or revenue:

Q.Entrance fee of Rs. 2,000 received by Ram and Shyam Social Club.

Solution:

Entrance fee of Rs. 2000 received by social club is an example of capital receipt. This is the income flow from one of the following sources. 

1.  Cash from the sale of fixed assets

2. Cash from the sale of shares in the business

3. Cash from the issuance of a debt instrument which includes loans and bonds. 

This should result either the reduction in government assets (sale of share, disinvestment) or increase in some liability (government borrowings).

QUESTION: 4

Classify the following expenditures and receipts as capital or revenue:

Q.Subsidy of Rs. 40,000 received from the government by a manufacturing concern.

Solution:
QUESTION: 5

Classify the following expenditures and receipts as capital or revenue:

Q.Insurance claim received on account of machinery damaged completely by fire.

Solution:
QUESTION: 6

Classify the following expenditures and receipts as capital or revenue:

Q.Interest on investments received from UTI.

Solution:
QUESTION: 7

Classify the following expenditures and receipts as capital or revenue:

Q.Amount received from IDBI as a medium term loan for augmenting working capital.

Solution:
QUESTION: 8

Classify the following expenditures and receipts as capital or revenue:

Q.A bad debt recovered during the year.

Solution:
QUESTION: 9

Classify the following expenditures and receipts as capital or revenue:

Q.A second hand car is purchased for Rs. 10,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owner’s name and Rs. 1,200 is paid as dealer’s commission.  The amount debited to car account will be

Solution:
QUESTION: 10

 

Q.Revenue from sale of products ordinarily is reported as part of the earning in the period

Solution:
QUESTION: 11

Classify the following expenditures and receipts as capital or revenue:

Q.If repair cost is Rs. 25,000, whitewash expenses are Rs. 5,000, cost of extension of building is Rs. 2,50,000 and cost of improvement in electrical wiring system is Rs. 19,000; the amount to be expensed is 

Solution:
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