Expenditures 50,000 Other Financing Sources— Capital Lease Agreements 50,000 Governmental Activities: Equipment 50,000 Capital … 1. Assets: Anything of value that a business owns 2. View Lesson 4.pdf from MANAGEMENT 91 at Welingkar Institute Of Management Development & Research, Mumbai. Ramamohan . Liabilities: Debts that a business owes; claims on assets by outsiders 3. 10.4 The historical cost convention looks backwards but the going concern convention looks forwards. Multiple choice questions (MCQs) Chhavi sharma . 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. 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. I think it is better to go through this MCQ’s. Reply. Freight and carriage. Capital and revenue items. Lesson 4 Accounting Process – III (Capital and Revenue Items) LESSON OUTLINE LEARNING This is revenue charge, but freight or carriage paid on a newly purchased fixed asset is capital expenditure. Nonetheless, these items are ultimately included as part of capital. Capital expenditure is taken to the balance sheet and doesn’t affect the profit and loss for the period. Revenue expenditure is also known as period 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. 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. Accounting for Capital Leases (Cont’d) Example: Capital lease with present value of minimum lease payments of $50,000 Special Revenue Fund: Dr. Cr. 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 Revenue expenditure includes wage expenses, rent payments and utility expenses. Nice. Revenue expenditure results in an expense in the statement of profit or loss. Failure to make distinction between capital and revenue items will result in A] under trading B] Revenue expenditure C] Capital expenditure D] Capital receipt 10. Syed alfaz . Capital expenditure includes buying non current assets. Each of these accounts fall into one of five categories. Reply. 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