_______is a revenue expenditure.

Freight paid on purchase of Plant and Machinery

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Legal expenses paid to acquire a property

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Expenses incurred to reduce working capital requirement

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Annual whitewash of the factory building

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Solution

The correct option is D Annual whitewash of the factory building
Normal wear and tear of building premises or plant & machinery are treated as routine repair & maintenance.
Annual white wash of factory building is also part of routine normal wear & tear, hence it is a revenue expenditure.

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Similar questions

Q. State whether the following expenses are capital or revenue in nature:
(i) Expenses on whitewashing and painting of a building purchased to make it ready for use.
(ii) ₹ 10,000 spent on constructing platform for a new machine.
(iii) Repair expenses of ₹ 25,000 incurred for whitewashing of factory building.
(iv) Insurance premium paid as renewal premium.
(v) Purchased a new car.

Distinguish between capital and revenue expenditure and state whether the following statements are items of capital or revenue expenditure.
(a) Expenditure incurred on repairs and whitewashing at the time of purchase of an old building in order to make it usable.
(b) Expenditure incurred to provide one more exit in a cinema hall in compliance with a government order.
(c) Registration fees paid at the time of purchase of a building.
(d) Expenditure incurred in the maintenance of a tea garden which will produce tea after four years.
(e) Depreciation charged on a plant.
(f) The expenditure incurred in erecting a platform on which a machine will be fixed.
(g) Advertising expenditure, the benefits of which will last for four years.

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-I	List-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. Expenses incurred on white washing of factory building done after every six months is Revenue Expenditure. (True/False)

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-I	List-II
I. Compensation paid to retrenched workers of the factory for the loss of service	(a) Capital expenditure
II. Legal expenses incurred in connection with the purchase of a plot of land	(b) Capital receipt
III. Compensation received from the government for the compulsory removal of a business premises to another place	(c) Revenue expenditure
IV. Sale proceeds of merchandise(goods)	(d) Revenue receipt

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_______is a revenue expenditure.

The correct option is D Annual whitewash of the factory buildingNormal wear and tear of building premises or plant & machinery are treated as routine repair & maintenance. Annual white wash of factory building is also part of routine normal wear & tear, hence it is a revenue expenditure.

The correct option is D Annual whitewash of the factory building
Normal wear and tear of building premises or plant & machinery are treated as routine repair & maintenance.
Annual white wash of factory building is also part of routine normal wear & tear, hence it is a revenue expenditure.