Question

If repair cost is Rs. 20,000 whitewash expenses are Rs. 10,000, cost of extension of building is Rs. 50,000 and cost of improvement in electrical wiring system is Rs. 20,000, the amount of revenue expenses will be ____________.

• A. Rs. 2,70,000
• B. Rs. 3,00,000
• C. Rs. 30,000
• D. Rs. 50,000

Answer 1

The correct option is C Rs. 30,000

Cost of repairs of Rs.20000 and whitewash expenses of Rs.10000 to be treated as revenue expenses and will be debited to profit & loss account. Hence Rs.30000 is revenue expenses.

Extension of building of Rs.50000 and improvement in electrical wiring system of Rs.20000 are the capital expenditure to be debited to the respective fixed asset account.