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Honorarium is a kind of remuneration paid to a person who is not the employee of a non-profit organization. Which of the following statements is true about the honorarium payment?
- a)It is a revenue expenditure
- b)It is not recorded in the books of accounts
- c)It is capital expenditure
- d)None of these
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Honorarium is a kind of remuneration paid to a person who is not the e...
Honorarium Payment as a Revenue Expenditure
Honorarium payment is a form of remuneration paid to a person who is not an employee of a non-profit organization. It is usually paid to recognize and appreciate the services rendered by such an individual, such as a guest speaker or a consultant. The payment is made without any contractual obligations and is usually a nominal amount.
The following are the reasons why honorarium payment is considered a revenue expenditure:
1. No Asset Creation
Honorarium payment does not result in any asset creation for the organization. It is a payment made for services rendered and does not have any long-term benefits for the organization.
2. No Capital Nature
Honorarium payment is not of a capital nature. It is made to recognize and appreciate the services rendered by an individual and does not involve the creation of any capital asset.
3. Charged to Income Statement
Honorarium payment is charged to the income statement of the organization as an operating expense. This expense is deducted from the revenue earned by the organization to arrive at the net income.
Conclusion
In conclusion, honorarium payment is considered a revenue expenditure as it is an expense incurred by the organization in the normal course of its operations. It does not result in the creation of any asset and is not of a capital nature. The payment is charged to the income statement and reduces the net income of the organization.
Honorarium payment is a form of remuneration paid to a person who is not an employee of a non-profit organization. It is usually paid to recognize and appreciate the services rendered by such an individual, such as a guest speaker or a consultant. The payment is made without any contractual obligations and is usually a nominal amount.
The following are the reasons why honorarium payment is considered a revenue expenditure:
1. No Asset Creation
Honorarium payment does not result in any asset creation for the organization. It is a payment made for services rendered and does not have any long-term benefits for the organization.
2. No Capital Nature
Honorarium payment is not of a capital nature. It is made to recognize and appreciate the services rendered by an individual and does not involve the creation of any capital asset.
3. Charged to Income Statement
Honorarium payment is charged to the income statement of the organization as an operating expense. This expense is deducted from the revenue earned by the organization to arrive at the net income.
Conclusion
In conclusion, honorarium payment is considered a revenue expenditure as it is an expense incurred by the organization in the normal course of its operations. It does not result in the creation of any asset and is not of a capital nature. The payment is charged to the income statement and reduces the net income of the organization.
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Community Answer
Honorarium is a kind of remuneration paid to a person who is not the e...
Because it is a recurring item and it is paid to outsider of organisation
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Honorarium is a kind of remuneration paid to a person who is not the employee of a non-profit organization. Which of the followingstatementsis true about the honorarium payment?a)It is a revenue expenditureb)It is not recorded in the books of accountsc)It is capital expenditured)None of theseCorrect answer is option 'A'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Honorarium is a kind of remuneration paid to a person who is not the employee of a non-profit organization. Which of the followingstatementsis true about the honorarium payment?a)It is a revenue expenditureb)It is not recorded in the books of accountsc)It is capital expenditured)None of theseCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Honorarium is a kind of remuneration paid to a person who is not the employee of a non-profit organization. Which of the followingstatementsis true about the honorarium payment?a)It is a revenue expenditureb)It is not recorded in the books of accountsc)It is capital expenditured)None of theseCorrect answer is option 'A'. Can you explain this answer?.
Honorarium is a kind of remuneration paid to a person who is not the employee of a non-profit organization. Which of the followingstatementsis true about the honorarium payment?a)It is a revenue expenditureb)It is not recorded in the books of accountsc)It is capital expenditured)None of theseCorrect answer is option 'A'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Honorarium is a kind of remuneration paid to a person who is not the employee of a non-profit organization. Which of the followingstatementsis true about the honorarium payment?a)It is a revenue expenditureb)It is not recorded in the books of accountsc)It is capital expenditured)None of theseCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Honorarium is a kind of remuneration paid to a person who is not the employee of a non-profit organization. Which of the followingstatementsis true about the honorarium payment?a)It is a revenue expenditureb)It is not recorded in the books of accountsc)It is capital expenditured)None of theseCorrect answer is option 'A'. Can you explain this answer?.
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