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Standard XII
Accountancy
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Income and ex...
Question

Income and expenditure account records transaction of ___________.

A
Revenue nature only
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B
Capital nature only
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C
Both capital and revenue nature
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D
Personal nature
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Solution

The correct option is A Revenue nature only
Income and expenditure account is like a profit & loss account. Only difference is that income & expenditure account is prepared by the non trading organization. This records only revenue nature items.

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Q. In the Receipt and Payment account both capital and revenue transactions are recorded, whereas in Income and Expenditure account ________ transactions are recorded.
Q. What are the three circumstances under which an expenditure which is usually of a revenue nature may be taken as an expenditure of a capital nature?
Q. Match List-I(Item of expenditure/receipt) with List-II(Nature of expenditure/receipt) and select the correct answer using the codes given the lists.
List-IList-II
I. Carriage charges a new machine purchased for factory(a) Revenue receipt
II. Legal expenses incurred in defending a case of violation of a provision of Factories Act(b) Revenue expenditure
III. Grant-in-aid received from the Government for the construction of a building(c) Deferred revenue expenditure
IV. Amount received for a part of the office building sublet(d) Capital expenditure
(e) Capital receipt

Q. State True or False:
Receipt and Payment Account records the receipts and payments of revenue nature only.
Q. Match List-I(Items of expenditure and receipt) with List-II(Nature of expenditure and receipt) and select the correct answer using the codes given the lists.
List-IList-II
I. Premium paid for a lease hold property(a) Revenue expenditure
II. Insurance premium paid for risks against accidental losses of properties(fixed assets)(b) Capital receipt
III. Amount realised from the sale of securities(investment)\ purchased earlier(c) Deferred revenue expenditure
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