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Question

Which of the following is not a capital expenditure?
  1. Amount paid for wages
  2. Improving permanent assets
  3. None of the above
  4. Purchase of land & building

A
Purchase of land & building
B
Amount paid for wages
C
None of the above
D
Improving permanent assets
Solution
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Revenue expenditure is expenditure concerned with the costs of doing business on a day to day basis. When companies make a revenue expenditure, the expense provides immediate benefits, rather than long term ones. Examples of revenue expenditure are wages or salaries paid to factory workers, machine Oil to lubricate. Hence option B is not the capital expenditure.

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