Question

Purchases of stationary is an ________ expenditure. (Fill in the blank by choosing correct option)
a) capital
b) revenue
c) long-term
d) deferred revenue

Answer 1

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Your Answer:-

option B) is the correct answer.



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Answer 2

Answer:

b) Revenue

Explanation:

Revenue expenditure is expenses incurred in conjunction with revenue generation activities. Normally we refer these as operating expenditure; i.e. expenditure that is necessary to sustain the operation of a business.

So interest payments which are usually to keep the business running and are short term is classified as revenue expenditure. Stationary purchases is one of the example of revenue expenditure.

When the benifit of an expenditure lasts for more than one financial year, then it is treated as capital expenditure. However, if the benifit of expenditure exhausts within a year, it is termed as revenue expenditure.

Hence, the correct option is (b).