The correct answer is option 'B', which states that the renewal fee for a patent is a revenue expenditure.

Explanation:
A patent is a form of intellectual property that grants exclusive rights to an inventor for a specific period of time. Patents need to be renewed periodically to maintain their validity and protection. The renewal fee is the cost associated with extending the duration of the patent.

Revenue Expenditure:
Revenue expenditures are expenses incurred by a business that are related to the day-to-day operations and maintenance of the business. These expenses are typically incurred in the current accounting period and are expected to provide benefits within that period. Revenue expenditures are deducted from the revenues generated by the business to determine the net income or profit.

The renewal fee for a patent is considered a revenue expenditure because it is an ongoing expense that is necessary for the continued protection and utilization of the patent. It is not a one-time capital expenditure because it is incurred periodically and is necessary for the ongoing operations of the business.

Key Points:
1. Definition of a patent: A form of intellectual property that grants exclusive rights to an inventor for a specific period of time.
2. Purpose of renewal fee: To extend the duration of the patent and maintain its validity and protection.
3. Revenue expenditure definition: Expenses incurred by a business that are related to day-to-day operations and maintenance.
4. Renewal fee classification: It is considered a revenue expenditure as it is an ongoing expense necessary for the continued protection and utilization of the patent.
5. Distinction from capital expenditure: Capital expenditures are typically one-time expenses incurred for the acquisition or improvement of long-term assets, while revenue expenditures are ongoing expenses for day-to-day operations.
6. Impact on financial statements: The renewal fee is deducted from revenues to determine the net income or profit of the business.