An expenditure is revenue in nature, when ____________.

it benefits the current period

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it benefits the future period

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it belongs to the previous period

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none of these

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Solution

The correct option is B it benefits the current period
Revenue expenditure are those which are incurred for day to day business operations. An expenditure is revenue in nature when it benefits the current period only. Examples are payment of salary etc.

Capital expenditure are those which are incurred for procurring an asset. Like purchase of plant, building etc. The benefit of capital expenditure is intended for future period.

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