Question

Honorarium is a kind of remuneration paid to a person who is not the employee of a nonprofit organization. Which of the following statements is true about the honorarium payment ?

• A. It's a revenue expenditure
• B. It's a capital expenditure
• C. It's a deferred revenue expenditure
• D. It is not recorded in the books of account

Answer 1

Answer: (A)

It's a revenue expenditure

The honorarium payment is a type of an outside expense for the organisation and the expenses which are paid to outsiders are a type of revenue expense. Thus, honorarium expenditure is of revenue nature.