final-account-trading-account-pl-acc-balance-sheet-1-6382.) State the characterstics  of revenue receipts ;

  1. Revenue receipts are of recurring nature .That is,they are received regularly or repeateadly.
  2. Revenue receipts are incomes for a concern.
  • Revenue receipts will appear in the revenue account.

Some of the  examples of revenue receipts are;

  1. Sale procceds of goods
  2. Interest received on loan garnted .
  • Interest or dividend received on investment.
  1. Interest received on bank
  2. Rent received .
  3. Sale proceed of old newspepers.
  • Sale proceeds of old sports matirials like old bats,old balls, old nets,etc.

4.State the characterstics of capital expentiture. Give some exampls of Capital Expentiture.

The  main characterstics expentiture are;

  1. Capital expenditure is non-recurring in nature.
  2. It reslts in increase in the productivityor earning -capacity of the business.
  • The benefit of capital expenditure exenteds to two or more years
  1. It is regareded as an asset ,and so ,it is teken to the assets side of the balance sheet of the business.

Some of the examples of capital expenditure are:

  1. Costs of fixed or permanent asset,such as lands,buildings ,machinery,patent rights,vehicles,furnicture ,tools,etc.purchased for used in the business.
  2. Costs of addition or extensions to existing fixed assets ,such as costs of addition to machinery , costs of extensions to buildings,etc
  • Any expenditure incurred in connection with the acquisition of fixed asset , e,g.,legal charges and brokerage paid for acquring land and buildings.
  1. Any expenditure incurred in bring the fixed assets purchased to the business premises,e.g.,carriage or freight paid for bringing the machinery purchased.
  2. Any expenditure incurred in installing a fixed asset e.g., wages incurred on the erectionof machinery or charges incurred on the fixing of fans.
  3. Any expentiture incurred forthe purpose of rasing capital for the business,brokerage or commission paid for raising capital or loans for the concern

5.State the charactrstics of the revenue expentiture .Given some examples of revenue expentiture.

The chief characterstics of revenue expenditure are;

  1. Revenur expenditure is recurring in the nature ,i, is incurred regularly or again and again .
  2. The benfit  of revenue  expenditure is exhausted within one year i.e,. in the year in which in incurred .
  • It is incurred only for maintaining ,and not for increasing the revenue-earing capicity of the business.
  1. As it is an expense,it will go to the debit side of the revenue account.

Some of the revenue expenditure are;

  1. Costs of goods purshased for resale.
  2. Expeness ,such as carriage,freigt,etc
  • Cost of metirials consumed in the manufacture of goods meat for resale.
  1. Expenses inurred in manufacturing goods for resale ,e.,g wages,power,factory rent, factory insurance,factory heating,etc.
  2. Expenses incurred for the day-to-day management of the business ,e.g., salaries ,rent,law charges,bank charges,printing and stationery,postage and telegrams,etc.
  3. Financial charges like interest on loan borrowed,interest on deposits accepted, interest on capital,etc