Question

State with reasons whether the following statement is true or false:
Amount paid to Management company for consultancy to reduce the working expenses is revenue expenditure.

• A. True
• B. False

Answer 1

The correct option is B False

Amount paid or payable to management company for consultation to reduce the working expenses is deferred revenue expenditure. Such expenditure gives long terms benefit to the business entity, and it cannot be realised in the market directly.