Revenue Expenditures:

Revenue expenditures refer to the expenses incurred by a business that are aimed at maintaining the normal operations and generating revenue in the short term. These expenses are typically incurred on a regular basis and are necessary for the day-to-day functioning of the business. The Rs. 5,000 spent as lawyers' fees to defend a suit claiming that the firm's factory site belonged to the plaintiff's land can be classified as a revenue expenditure.

Explanation:

1. Nature of the Expenditure:
The expenditure incurred in paying the lawyers' fees to defend a suit is a recurring expense that is necessary for the continued operations of the business. It is not a one-time capital expenditure that would result in the acquisition of an asset or the enhancement of the firm's earning capacity in the long term.

2. Maintenance of Normal Operations:
The lawyers' fees are incurred to resolve a legal dispute that directly affects the firm's ability to continue its operations smoothly. By defending the suit, the firm aims to protect its factory site and maintain its normal operations. Therefore, the expenditure can be considered as necessary for the ongoing business activities and is not aimed at acquiring a new asset or improving the business's efficiency in the long run.

3. Short-term Nature:
The lawyers' fees are a short-term expense that is incurred to resolve a specific legal issue. It does not result in the creation of a long-term asset or have a lasting impact on the firm's earning capacity. Once the legal dispute is resolved, the expenditure is not expected to provide any future benefits to the firm.

Conclusion:
In conclusion, the Rs. 5,000 spent as lawyers' fees to defend a suit claiming that the firm's factory site belonged to the plaintiff's land can be classified as a revenue expenditure. This expenditure is recurring, necessary for the maintenance of normal operations, and does not result in the acquisition of a long-term asset or improvement in the firm's earning capacity.