Question

Heavy advertising expenditure for launching a new product is called as _______.

• A. Capital Expenditure
• B. Revenue Expenditure
• C. Deferred Revenue Expenditure
• D. None of these

Answer 1

The correct option is C Deferred Revenue Expenditure

Deferred Revenue Expenditure is an expenditure which is revenue in nature and incurred during an accounting period, but its benefits are to be derived in multiple future accounting periods.

A heavy advertising expenditure for launching a new product is a deferred revenue expenditure, as it is made in a particular year, but its benefits are derived in the future accounting years.