Question

Salary paid to an Army Officer and interest paid on the national debt is an example of:

[0.80 marks]

• A. Capital expenditure
• B. Revenue expenditure
• C. Budget expenditure
• D. Non-budget expenditure

Answer 1

The correct option is B Revenue expenditure

Revenue expenditure refers to the expenditure that neither creates assets nor reduces the liability of the government.
Salary paid to an Army Officer and interest paid on the national debt is an example of revenue expenditure. It neither creates any asset nor reduces liability of the government.