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 A truck was purchased and after sometime, the name of the company was painted on it for advertisement purpose for Rs. 1,000/- this is:
  • a)
    Capital Expenditure
  • b)
    Deferred Revenue Expenditure 
  • c)
    Revenue Expenditure
  • d)
    None
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
A truck was purchased and after sometime, the name of the company was ...
A revenue expenditure is an amount that is expensed immediately—thereby being matched with revenues of the current accounting period. Routine repairs are revenue expenditures because they are charged directly to an account such as Repairs and Maintenance Expense.
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Most Upvoted Answer
A truck was purchased and after sometime, the name of the company was ...
Explanation:
The expenditure of Rs. 1,000/- on painting the name of the company on the truck is a revenue expenditure. This is because it is an expense incurred for the purpose of advertising and promoting the business, which will result in generating revenue for the company in the future.

Revenue Expenditure:
Revenue expenditure is an expense incurred in the ordinary course of business, which is aimed at generating revenue in the short term. It is an expense that is incurred to maintain or improve the earning capacity of the business.

Examples of Revenue Expenditure:
1. Rent paid for the office space
2. Wages paid to employees
3. Advertising and promotional expenses
4. Repair and maintenance expenses

Capital Expenditure:
Capital expenditure is an expenditure that is incurred for the acquisition of a long-term asset or to improve the earning capacity of the business in the long term. Capital expenditure is not fully written off in the year in which it is incurred, but is depreciated over the useful life of the asset.

Examples of Capital Expenditure:
1. Purchase of land and building
2. Purchase of machinery and equipment
3. Construction of a new factory
4. Acquisition of a patent or trademark

Deferred Revenue Expenditure:
Deferred revenue expenditure is an expenditure that is incurred in the current year, but its benefits are expected to accrue over a number of years in the future. These expenses are charged to profit and loss account over a number of years.

Examples of Deferred Revenue Expenditure:
1. Advertisement expenditure
2. Preliminary expenses incurred at the time of incorporation
3. Expenses incurred on the issue of shares or debentures
4. Expenses incurred on the acquisition of a new business.

Conclusion:
In this case, the expenditure of Rs. 1,000/- on painting the name of the company on the truck is a revenue expenditure, as it is aimed at generating revenue in the short term.
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Community Answer
A truck was purchased and after sometime, the name of the company was ...
The Advt cost is too low that's y it will be revenue expenditure not capital
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A truck was purchased and after sometime, the name of the company was painted on it for advertisement purpose for Rs. 1,000/- this is:a)Capital Expenditureb)Deferred Revenue Expenditurec)Revenue Expenditured)NoneCorrect answer is option 'C'. Can you explain this answer?
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A truck was purchased and after sometime, the name of the company was painted on it for advertisement purpose for Rs. 1,000/- this is:a)Capital Expenditureb)Deferred Revenue Expenditurec)Revenue Expenditured)NoneCorrect 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 A truck was purchased and after sometime, the name of the company was painted on it for advertisement purpose for Rs. 1,000/- this is:a)Capital Expenditureb)Deferred Revenue Expenditurec)Revenue Expenditured)NoneCorrect 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 A truck was purchased and after sometime, the name of the company was painted on it for advertisement purpose for Rs. 1,000/- this is:a)Capital Expenditureb)Deferred Revenue Expenditurec)Revenue Expenditured)NoneCorrect answer is option 'C'. Can you explain this answer?.
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