CA Foundation Exam > CA Foundation Questions > Classify the following expenditures and recei...
Start Learning for Free
Classify the following expenditures and receipts as capital or revenue:
Q.Amount received from IDBI as a medium term loan for augmenting working capital.
- a)Capital expenditures
- b)Revenue expenditures
- c)Capital receipt
- d)Revenue receipt
Correct answer is option 'C'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Classify the following expenditures and receipts as capital or revenue...
Capital or Revenue Expenditure and Receipts
Capital and revenue expenditures and receipts are important concepts in accounting. Capital expenditures are expenses incurred for acquiring or improving fixed assets, whereas revenue expenditures are expenses incurred for operating the business. Capital receipts are funds received by the company from the sale of assets or loans, whereas revenue receipts are funds received from the normal business operations.
Explanation
In the given scenario, the amount received from IDBI is a medium-term loan for augmenting working capital. This is a capital receipt because it is a loan and not earned from the normal business operations. The company can use this loan to improve its working capital, which is a revenue expenditure.
Therefore, the correct answer is option C, which is capital receipt.
Conclusion
Understanding the difference between capital and revenue expenditures and receipts is important for businesses to properly account for their financial transactions. Capital expenditures and receipts affect the company's long-term assets and liabilities, while revenue expenditures and receipts affect the company's short-term operations.
Capital and revenue expenditures and receipts are important concepts in accounting. Capital expenditures are expenses incurred for acquiring or improving fixed assets, whereas revenue expenditures are expenses incurred for operating the business. Capital receipts are funds received by the company from the sale of assets or loans, whereas revenue receipts are funds received from the normal business operations.
Explanation
In the given scenario, the amount received from IDBI is a medium-term loan for augmenting working capital. This is a capital receipt because it is a loan and not earned from the normal business operations. The company can use this loan to improve its working capital, which is a revenue expenditure.
Therefore, the correct answer is option C, which is capital receipt.
Conclusion
Understanding the difference between capital and revenue expenditures and receipts is important for businesses to properly account for their financial transactions. Capital expenditures and receipts affect the company's long-term assets and liabilities, while revenue expenditures and receipts affect the company's short-term operations.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer?
Question Description
Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer?.
Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer?.
Solutions for Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Classify the following expenditures and receipts as capital or revenue:Q.Amount received from IDBI as a medium term loan for augmenting working capital.a)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup