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Classify the following expenditures and receipts as capital or revenue:
Q.Money spent Rs. 10,000 as traveling expenses of the directors on trips abroad for purchase of capital assets is
- a)Capital expenditures
- b)Revenue expenditures
- c)Deferred revenue expenditures
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Classify the following expenditures and receipts as capital or revenue...
Classification of Expenditures and Receipts
Capital Expenditures
- Expenses incurred for acquiring or improving a long-term asset
- Expected to provide benefits over several accounting periods
- Recorded as an asset on the balance sheet
Revenue Expenditures
- Expenses incurred for the day-to-day operations of the business
- Expected to provide benefits only for the current accounting period
- Recorded as an expense on the income statement
Deferred Revenue Expenditures
- Expenses incurred for the benefit of more than one accounting period
- Apportioned over the accounting periods benefited
- Recorded as an asset on the balance sheet and expensed over time
Answer Explanation
In the given scenario, the money spent on traveling expenses of directors on trips abroad for the purchase of capital assets is classified as a capital expenditure. This is because the purpose of the traveling expenses was to acquire capital assets, which are long-term assets that will provide benefits over several accounting periods. The expenses incurred for the acquisition of these assets are recorded as an asset on the balance sheet and are not expensed immediately.
Therefore, the correct answer is option 'A' - Capital Expenditures.
Capital Expenditures
- Expenses incurred for acquiring or improving a long-term asset
- Expected to provide benefits over several accounting periods
- Recorded as an asset on the balance sheet
Revenue Expenditures
- Expenses incurred for the day-to-day operations of the business
- Expected to provide benefits only for the current accounting period
- Recorded as an expense on the income statement
Deferred Revenue Expenditures
- Expenses incurred for the benefit of more than one accounting period
- Apportioned over the accounting periods benefited
- Recorded as an asset on the balance sheet and expensed over time
Answer Explanation
In the given scenario, the money spent on traveling expenses of directors on trips abroad for the purchase of capital assets is classified as a capital expenditure. This is because the purpose of the traveling expenses was to acquire capital assets, which are long-term assets that will provide benefits over several accounting periods. The expenses incurred for the acquisition of these assets are recorded as an asset on the balance sheet and are not expensed immediately.
Therefore, the correct answer is option 'A' - Capital Expenditures.
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Community Answer
Classify the following expenditures and receipts as capital or revenue...
The answer is capital expenditure because the money spent on travelling to purchase goods and the goods are purchase for business so it is a capital expenditure,and if goods are not purchase for business then it is a revenue expenditure.
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Classify the following expenditures and receipts as capital or revenue:Q.Money spent Rs. 10,000 as traveling expenses of the directors on trips abroad for purchase of capital assets isa)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?
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Classify the following expenditures and receipts as capital or revenue:Q.Money spent Rs. 10,000 as traveling expenses of the directors on trips abroad for purchase of capital assets isa)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'A'. 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.Money spent Rs. 10,000 as traveling expenses of the directors on trips abroad for purchase of capital assets isa)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'A'. 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.Money spent Rs. 10,000 as traveling expenses of the directors on trips abroad for purchase of capital assets isa)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?.
Classify the following expenditures and receipts as capital or revenue:Q.Money spent Rs. 10,000 as traveling expenses of the directors on trips abroad for purchase of capital assets isa)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'A'. 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.Money spent Rs. 10,000 as traveling expenses of the directors on trips abroad for purchase of capital assets isa)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'A'. 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.Money spent Rs. 10,000 as traveling expenses of the directors on trips abroad for purchase of capital assets isa)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?.
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