Question

Match List I with List II and select the correct answer using the codes given below the lists.
List I List II
A. Heavy advertisement expenses 1. Capital expenditure
B. Travelling expenses of the salesman 2. Revenue expenditure
C. Profit on the sale of office building 3. Capital gain
D. Purchase of plant and machinery 4. Deferred revenue expenditure

• A. A- 4, B- 2, C- 3, D- 1
• B. A- 4, B- 2, C- 1, D- 3
• C. A- 2, B- 4, C- 3, D- 1
• D. A- 2, B- 4, C- 1, D- 3

Answer 1

Answer: (A)

A- 4, B- 2, C- 3, D- 1

Heavy amount spent for the advertisement of new company product is Deferred Revenue expenditure. Deferred Revenue Expenditure is an expenditure which is revenue in nature and incurred during an accounting period, but its benefits are to be derived in multiple future accounting periods.

Capital Expenditure money spent by a business or organization on acquiring or maintaining fixed assets, such as land, buildings, and equipment.

Capital gain is a rise in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price.

A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place.