1. Posted in: Capital and revenue items (explanations) Capital and revenue expenditures are two different types of business expenditures that we often find in financial accounting and reporting. 10.3 Explain the term 'materiality' as it is used in accounting. Revenue expenditure results in an expense in the statement of profit or loss. Each of these accounts fall into one of five categories. Accounting concepts & Capital and Revenue expenditure 10.1 What is meant by the 'money measurement concept? Multiple choice questions (MCQs) Chhavi sharma . 1.1 Accounting Principles, Concepts and Conventions 1 1.2 Capital and Revenue transactions - capital and revenue expenditures, capital and 15revenue receipts 1.3 Double entry system, Books of prime entry, Subsidiary Books, Cash Book, Journal, 25Ledger, Trial Balance Failure to make distinction between capital and revenue items will result in A] under trading Capital and revenue items. Revenue expenditure includes wage expenses, rent payments and utility expenses. A debt recorded as bad in the earlier year recovered during the year is a A] Revenue receipt B] Revenue expenditure C] Capital expenditure D] Capital receipt 11. Accounting for Capital Leases (Cont’d) Example: Capital lease with present value of minimum lease payments of $50,000 Special Revenue Fund: Dr. Cr. Syed alfaz . Reply. revenue items such as rent received or commission received Capital expenditure results in the appearance of a non-current asset in the statement of financial position of the business. Assets: Anything of value that a business owns 2. Nonetheless, these items are ultimately included as part of capital. Freight and carriage. Reply. View Lesson 4.pdf from MANAGEMENT 91 at Welingkar Institute Of Management Development & Research, Mumbai. 10.2 Explain the concept of prudence in relation to the recognition of profits and losses. Repairs and renewals are usually treated as items’of revenue charge, but if an old asset is purchased the amount spent on its immediate repair by the purchaser to put it in working order is capital expenditure. PRINCIPLES OF FINANCIAL ACCOUNTING ACCOUNTING CYCLE - SERVICE - CASH There are many items that businesses keep records of. 10.4 The historical cost convention looks backwards but the going concern convention looks forwards. Lesson 4 Accounting Process – III (Capital and Revenue Items) LESSON OUTLINE LEARNING I think it is better to go through this MCQ’s. Ramamohan . Income Revenues refer to the amounts earned from the company’s ordinary course of business such as professional fees or service revenue for service companies and sales for merchandising and manufacturing concerns. Nice. Revenue expenditure is also known as period expenses. 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