Question

There are certain expenses which may be in the nature of revenue but their benefit may not be consumed in the year in which such expenditure has been incurred; rather the benefit may extend over a number of years are termed as____________.

• A. Capital expenditure
• B. Revenue expenditure
• C. Deferred revenue expenditure
• D. None of the above

Answer 1

The correct option is C 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.

These expenses are usually large in amount and benefits are not consumed within the same accounting period. Part of the amount is shown is shown in profit and loss account and is reduced from total expenditure and rest is shown in balance sheet.