Is Depreciation a Revenue Expenditure?

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Solution

Depreciation of fixed assets is considered as a revenue expenditure since the asset is used for the daily operations of the business.

Also read:

Difference Between Capital Expenditure and Revenue Expenditure

Income and Expenditure Account Based on Trial Balance

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Similar questions

Distinguishbetween capital and revenue expenditure and state whether thefollowing statements are items of capital or revenue expenditure:

(a)Expenditure incurred on repairs and whitewashing at the time ofpurchase of an old building in order to make it usable.

(b)Expenditure incurred to provide one more exit in a cinema hall incompliance 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 willproduce tea after four years.

(e)Depreciation charged on a plant.

(f)The expenditure incurred in erecting a platform on which a machinewill be fixed.

(g)Advertising expenditure, the benefits of which will last for fouryears.

Q. _______is a revenue expenditure.

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. The adjustment entry to write off deferred revenue expenditure is?

Deferred Revenue Expenditure A/c To Profit & Loss A/c	Dr.
Expense A/c To Profit & Loss A/c	Dr.
Profit & Loss A/c To Provision for Expense A/c	Dr.
Profit & Loss A/c To Deferred Revenue Expenditure A/c	Dr.

Q. Depreciation is _________ expenditure.

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