Question

Expenses the benefit of which does not last more than 12 months are treated as ______.

• A. deferred revenue expense
• B. revenue expense
• C. capital expense
• D. loss

Answer 1

The correct option is B revenue expense

If the benefit of expenditure is exhausted within a year, it is treated as an expense (also called as revenue expenditure). Following are few examples of revenue expenditure are:

1. Purchases

2. Wages

3. Freight inward & outward

4. Salary and wages

5. Selling and distribution expenditure

6. Depreciation

7. Interest on borrowings

8. Loss on sale of fixed assets