Which one of these is a revenue expenditure ?

Purchase of shares

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Loans advanced

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Subsidies

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Expenditure on acquisition of land

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Solution

The correct option is C Subsidies
Revenue expenditure are those expenses that do not reduce the liabilities of the government and do not create any assets for the government.
Explanation
(a) Purchase of shares leads to creation of assets
(b) Advancing of loan is an asset for the government
(d) Expenditure incurred on the acquisition of land leads to creation of fixed asset (i.e. Land)
Thus, it is the payment of subsidies that neither reduces liabilities nor creates assets. Therefore, subsidies are revenue expenditure.
Hence, the correct answer is option (c).

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