Question

Which of the following is not an example of Revenue Expenditure ?

• A. Machinery
• B. Salaries
• C. Electricity Charges
• D. Travelling Expenses

Answer 1

The correct option is A Machinery

All the expenditures which are incurred in the day to day conduct and administration of a business and the effect of which is completely exhausted within the current accounting year are known as "revenue expenditures". These expenditures are recurring by nature i.e. which are incurred for meeting day to day requirements of a business and the effect of these expenditures is always short-lived i.e. the benefit thereof is enjoyed by the business within the current accounting year. These expenditures are also known as "expenses or expired costs." e.g. Purchase of goods, salaries paid, postage, rent, traveling expenses, stationery purchased, wages paid on goods purchased etc.

purchase and sale of machinery is not a day to day activity unless it is a business in machinery dealing and hence, it is not a revenue expenditure.