Theoretical Framework -Capital & Revenue Expenditures & Receipts and Contingent Assets and Liabiliti 0 Theoretical Framework -Capital & Revenue Expenditures & Receipts and Contingent Assets and Liabiliti 1 / 30 Q.30 capital introduced is Capital receipt Revenue receipt Advance receipt None of these 2 / 30 Q.29 loans raised is Capital receipt Revenue receipt Advance receipt None of these 3 / 30 Q.28 A second hand car is purchased for Rs.20,000 ,the amount of Rs.3,000 is spent to its repairs , Rs.1,000 is incurred to get the car registered in owner's name & Rs.2,000 is paid as dealer commission.The amount debited to car account will be Rs.20,000 Rs.23,000 Rs.24,000 Rs.26,000 4 / 30 Q.27 purchase of goodwill is Capital expenditure Revenue expenditure Deferred revenue expenditure Prepaid expenses 5 / 30 Q.26 legal expenses to recover dues from customers Capital expenditure Revenue expenditure Deferred revenue expenditure Prepaid expenses 6 / 30 Q.25 expenses to obtain a license for starting a factory is Capital expenditure Revenue expenditure Deferred revenue expenditure Prepaid expenses 7 / 30 Q.24 repair of a second hand machinery before put to use Capital expenditure Revenue expenditure Deferred revenue expenditure Prepaid expenses 8 / 30 Q.23 Advertising camping to launch a new to products Capital expenditure Revenue expenditure Deferred revenue expenditure None of these 9 / 30 Q.22 Rs.1,200 spent on the repairs of machine Capital expenditure Revenue expenditure Deferred revenue expenditure None of these 10 / 30 Q.21 If repair cost is Rs.25,000, whitewash expenses are Rs.5,000,cost of extension of building is Rs.2,50,000 and cost of improvement in electrical wiring system is Rs.19,000;the amount to be expensed is Rs.2,99,000 Rs.44,000 Rs.30,000 Rs.49,000 11 / 30 Q.20 Which of the following expenditure is/are revenue expenditure ? Heavy expenditure incurred on advertising a new product Preliminary expenses incurred in setting up a joint stock company Both (a) & (b) Neither (a) nor (b) 12 / 30 Q.19 A contingent liability is a possible obligation that arises from_______ and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise.It is a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefit will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be determined" Past events Future events Probable events None of the above 13 / 30 Q.18 If capital losses are negligible,they are_______of the year in which they occur. Debited to profit & loss account Shown in balance sheet on the assets side Shown in balance sheet on the liability side None of the above 14 / 30 Q.17 Which of the following is/are non-recurring in nature ? capital expenditure Revenue expenditure Deferred revenue expenditure All of the above 15 / 30 Q.16 Expenses incurred to maintain the business,cost of store consumed in the course of manufacturing e.g.oil ,cotton-waste are___ Capital expenditure Revenue expenditure Deferred revenue expenditure None of the above 16 / 30 Q.15 Depreciation on fixed assets is______ Capital expenditure Revenue Expenditure Deferred revenue expenditure None of the above 17 / 30 Q.14 Which of the following is/are example of capital expenditure ? Purchase of land & building by the property dealer Purchase of machinery by machinery dealer Expenses incurred for getting patents All of the above 18 / 30 Q.13 if a reliable estimates of probable outflow of resources to settle a present obligation can be made ,it is To be recognized as Liability To be recognized as provision to be disclosed as a contingent Liability None of these 19 / 30 Q.12 In the financial statement , contingent asset is Recognized Not recognized Adjusted None of these 20 / 30 Q.11 If an inflow of economics benefits is probable then a contingent asset is disclosed In the financial statements In the report of the approving authority (Board of Directors in the case of a company , and the corresponding approving in the case of any other enterprise). In the cash flow statements None of these 21 / 30 Q.10 sale of goods for credit is Capital receipt Revenue receipt Advance receipt None of these 22 / 30 Q.9 cash received from debtor is Capital receipt Revenue receipt Advance receipt None of these 23 / 30 Q.8 premium received on issue of shares Capital receipt Revenue receipt Advance receipt None of these 24 / 30 Q.7 purchase of patents rights Capital expenditure Revenue expenditure Deferred revenue expenditure Prepaid expenses 25 / 30 Q.6 money spent to reduce working expenses is Capital expenditure Revenue expenditure Deferred revenue expenditure Prepaid expenses 26 / 30 Q.5 Which of the following expenditure is/are revenue expenditure ? A firm incurred Rs.10,000 to retain the title of a land purchase for business in litigation with third party. Freight and cartage amounting to Rs.4,000 were paid on purchase of raw material. Damages paid on account of breach of contract to supply certain goods All of the above 27 / 30 Q.4 Fee paid to lawyer for checking whether all the papers are in order before land is purchased is_______but if later a suit is filed against the purchaser,the legal costs will be______ Capital Expenditure,Revenue expenditure Revenue expenditure,Revenue expenditure Deferred revenue expenditure,Revenue expenditure Revenue expenditure,Capital expenditure 28 / 30 Q.3 sale of investments is Capital receipt Revenue receipt Advance receipt None of these 29 / 30 Q.2 amount spent on demolition of an old building to construct a bigger building on the same site is Capital expenditure Revenue expenditure Deferred revenue expenditure Prepaid expenses 30 / 30 Q.1 inauguration expenses on opening of a new branch of an existing business Capital expenditure Revenue expenditure Deferred revenue expenditure Prepaid expenses Your score is LinkedIn Facebook Twitter VKontakte