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Classify the following expenditures and receipts as capital or revenue:
Q.Amount of Rs. 5,000 spent as lawyers’ fee to defend a suit claiming that the firm’s factory site belonged to the plaintiff’s land.
- a)Capital expenditures
- b)Revenue expenditures
- c)Deferred revenue expenditures
- d)None of the above
Correct answer is option 'B'. Can you explain this answer?
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Classify the following expenditures and receipts as capital or revenue...
Expenditure: Rs. 5,000 spent as Lawyer's fee to defend a suit claiming that the firm's factory site belonged to the plaintiff's land.
Revenue expenditures are those expenditures that are incurred for the purpose of generating revenue or maintaining the revenue-earning capacity of the business. They are recurring in nature and are charged to the profit and loss account. Capital expenditures, on the other hand, are those expenditures that are incurred for acquiring, improving, or maintaining fixed assets. They are non-recurring in nature and are charged to the balance sheet.
In this case, the amount of Rs. 5,000 spent as lawyers fee to defend a suit is a revenue expenditure. This is because:
- It is incurred for the purpose of maintaining the revenue-earning capacity of the business. If the plaintiff's claim had been successful, the firm would have lost its factory site, which would have affected its revenue-earning capacity.
- It is a recurring expenditure, as the firm may face similar suits in the future.
- It is charged to the profit and loss account, as it is a revenue expenditure.
Therefore, the correct answer is option B - Revenue expenditures.
Revenue expenditures are those expenditures that are incurred for the purpose of generating revenue or maintaining the revenue-earning capacity of the business. They are recurring in nature and are charged to the profit and loss account. Capital expenditures, on the other hand, are those expenditures that are incurred for acquiring, improving, or maintaining fixed assets. They are non-recurring in nature and are charged to the balance sheet.
In this case, the amount of Rs. 5,000 spent as lawyers fee to defend a suit is a revenue expenditure. This is because:
- It is incurred for the purpose of maintaining the revenue-earning capacity of the business. If the plaintiff's claim had been successful, the firm would have lost its factory site, which would have affected its revenue-earning capacity.
- It is a recurring expenditure, as the firm may face similar suits in the future.
- It is charged to the profit and loss account, as it is a revenue expenditure.
Therefore, the correct answer is option B - Revenue expenditures.
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Community Answer
Classify the following expenditures and receipts as capital or revenue...
As it's being filled against ur already aquired asset so in that case it lol b tarts as a revenue exp
But n case f u file a case against a newly I.e ur to get it then it'll b a capital exp
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Classify the following expenditures and receipts as capital or revenue:Q.Amount of Rs. 5,000 spent as lawyers’ fee to defend a suit claiming that the firm’s factory site belonged to the plaintiff’s land.a)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'B'. Can you explain this answer?
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Classify the following expenditures and receipts as capital or revenue:Q.Amount of Rs. 5,000 spent as lawyers’ fee to defend a suit claiming that the firm’s factory site belonged to the plaintiff’s land.a)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'B'. 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.Amount of Rs. 5,000 spent as lawyers’ fee to defend a suit claiming that the firm’s factory site belonged to the plaintiff’s land.a)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'B'. 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.Amount of Rs. 5,000 spent as lawyers’ fee to defend a suit claiming that the firm’s factory site belonged to the plaintiff’s land.a)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'B'. Can you explain this answer?.
Classify the following expenditures and receipts as capital or revenue:Q.Amount of Rs. 5,000 spent as lawyers’ fee to defend a suit claiming that the firm’s factory site belonged to the plaintiff’s land.a)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'B'. 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.Amount of Rs. 5,000 spent as lawyers’ fee to defend a suit claiming that the firm’s factory site belonged to the plaintiff’s land.a)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'B'. 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.Amount of Rs. 5,000 spent as lawyers’ fee to defend a suit claiming that the firm’s factory site belonged to the plaintiff’s land.a)Capital expendituresb)Revenue expendituresc)Deferred revenue expendituresd)None of the aboveCorrect answer is option 'B'. Can you explain this answer?.
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