Which of the following are the expenses of an organisation?

Purchase of machinery

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Purchase of goods for sale

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Paying the electricity bill

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Introducing capital in the business

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Solution

The correct option is C
Paying the electricity bill

An expense is the money spent or cost incurred,an entity's effort to generate revenue. Paying the electricity bill is an expense. Though goods purchased is money spent for business but it is regarded as purchases & not expenses. Also, purchase of machinery is not an expense rather it is an asset which is held for a long time in the course of business.

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Similar questions

Rohit has the following transactions:

		Rs
(a)	Commenced business with cash	1,50,000
(b)	Purchased machinery on credit	40,000
(c)	Purchased goods for cash	20,000
(d)	Purchased car for personal use	80,000
(e)	Paid to creditors in full settlement	38,000
(f)	Sold goods for cash costing Rs 5,000	4,500
(g)	Paid rent	1,000
(h)	Commission received in advance	2,000

Prepare the Accounting Equation to show the effect of the above transactions on the assets, liabilities and capital.

Mention the subsidiary books in which the following transactions are recorded with reason thereof.

(i) Purchase of furniture on credit for use in a shop.

(ii) Sale of goods on credit.

(iii) Goods returned by debtors

(iv) Purchase of stock on credit.

(v) Providing for interest on capital to a proprietor.

(vi) Goods returned to creditors.

(vii) Sale of goods for cash.

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