give reason categorize the following into revenue and capital expenditure. a. subsidies b. Grant given to state government. c.repayment of loans. d. construction of school building
Answers
Answer:
Subsidies is a revenue expenditure as revenue expenditure refers to the estimated expenditure in a fiscal year which does not create assets for the government or reduction in liabilities.
Grants given to the state government is a revenue expenditure as it does not cause any reduction in the assets and we know, revenue expenditure refers to the estimated expenditure in a fiscal year which does not create assets for the government or reduction in liabilities.
Repayment of loans is a capital expenditure as it causes reduction in liabilities of the government.
Construction of school buildings is not a revenue expenditure because revenue expenditure refers to the estimated expenditure in a fiscal year which does not create assets for the government or cause reduction in liabilities for the government.
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