Home » Quizzes » Capital and revenue items » Multiple choice questions (MCQs) quiz Capital and revenue items Multiple choice questions (MCQs) quiz Posted in: Capital and revenue items (quizzes) By: Rashid Javed | Updated on: August 25th, 2024 /22 Chapter: Capital and revenue itemsQuiz type: Multiple choice questions (MCQs) quizNumber of questions: 22Estimated time required: 12 - 15 minutesPassing score: 60%Your result will be displayed at the end of the quiz. 1. An expenditure whose benefit is enjoyed for more than one financial year is known as a capital expenditure. revenue expenditure long term expenditure extra ordinary expenditure capital expenditure 2. An expenditure that provides benefit for less than one financial period is known as: ordinary expenditure regular expenditure revenue expenditure nominal expenditure 3. Which of the following expenditures is a capital expenditure? Purchase of raw materials Purchase of plant Rent Depreciation 4. Which of the following expenditures is not a capital expenditure? Purchase of equipment Purchase of copyright Cost of issue of shares Insurance premium 5. In accounting and finance, the inflows of economic resources which occur occasionally and which are normally non-recurring in nature are known as: revenue receipts capital receipts unusual receipts additional receipts 6. The inflows of economic resources that occur routinely through the ordinary course of business is known as: revenue receipts regular receipts primary receipts basic income 7. Which of the following receipts is not a capital receipt? Cash received from sale of a fixed asset Loan received from a bank Cash received as rental income Cash received from sale of shares 8. Which of the following receipts is a capital receipt? Interest received on investment Commission income received Sales revenue received None of the above 9. Which of the following is not a correct statement? Capital expenditures become a part of balance sheet Revenue expenditures are shown in the income statement Revenue receipts become a part of balance sheet Revenue receipts are shown in the income statement 10. Which of the following will not be shown in the income statement? Interest on investment Insurance premium Purchase of equipment Depreciation on equipment 11. The term “CapEx” is used for: capital extension capital expansion capital expenditure capital explosion 12. Which one of the following is not a characteristic of capital profit? It occurs as a result of sale of fixed assets It occurs as a result of issuing shares and debentures It is non-recurring or irregular in nature It is earned from sale of stock-in-trade 13. The loss of building from fire is a: revenue loss revenue expenditure capital expenditure capital loss 14. Saffron Company bought a new machine for $25,000 and incurred $1,500 on its installation. How would the company classify two expenditures? $25,000 is capital expenditure and $1,500 is revenue expenditure $25,000 is revenue expenditure and $1,500 is capital expenditure Both are capital expenditures Both are revenue expenditures 15. Exxon Company paid $50,000 for a new machine purchased by it and paid $2,000 to a professional for installation. How would the company classify two payments? $50,000 is capital payment and $2,000 is revenue payment $50,000 is revenue payment and $2,000 is capital payment Both are revenue payments Both are capital payments 16. Any expenditure incurred to install a new plant or machinery is classified as: capital expenditure revenue expenditure extra ordinary expenditure none of the above 17. The unexpired portion of a capital expenditure is shown as: income in income statement asset in balance sheet liability in balance sheet expense in income statement 18. The amount spent to increase the production capacity of plant and machinery is a: revenue expenditure capital expenditure deferred revenue expenditure none of the above 19. On January 1, 2018, Robert Trading Company buys a delivery truck for $20,000 and decides to depreciate it using a straight line method of depreciation. The useful life of the delivery truck is 10 years.Based on the above information, the company’s expenditures relating to the delivery truck during the year 2018 would be: capital expenditure of $20,000 and revenue expenditure of $2,000 capital expenditure of $2,000 and revenue expenditure of $20,000 only capital expenditure of $20,000 only revenue expenditure of $2,000 20. Depreciation on fixed assets is an example of: capital expenditure accrued expenditure prepaid expenditure revenue expenditure 21. Maria Textile Company paid custom duty amounting to $5,000 on import of a latest machine. The payment of custom duty is a: revenue expenditure capital expenditure indirect expenditure external expenditure 22. The expenditures like wages, salaries, freight, carriage, insurance, rent, depreciation etc. are examples of: production expenditures justifiable expenditures capital expenditures revenue expenditures 0% Restart quiz Help us grow by sharing our content ♡
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