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CBSE Questions for Class 10 Elements Of Book Keeping And Accountancy Capital And Revenue Quiz 3 - MCQExams.com
CBSE
Class 10 Elements Of Book Keeping And Accountancy
Capital And Revenue
Quiz 3
Fee paid to a lawyer for checking whether all the papers are in order before land is purchased is ___________ But if later a suit is filed against the purchaser, the legal costs will be ___________.
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0%
Capital expenditure, Revenue expenditure
0%
Revenue expenditure, Revenue expenditure
0%
Deferred Revenue expenditure, Revenue expenditure
0%
Revenue expenditure, Capital expenditure
The interest on calls-in-advance is paid for the period from the _________________.
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0%
Date of receipt of application money to the date of allotment
0%
Date of receipt of allotment money to the date of appropriation
0%
Date of receipt of advance money to the date of appropriation
0%
Date of appropriation to the date of dividend payment
Explanation
Interest on calls in advance may be paid from the date of receipt of the advance to the date of appropriation i.e. to the date of making the call.
Therefore, C is the correct option.
Sales are equal to__________.
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0%
Cost of goods sold $$+$$ Gross Profit
0%
Cost of goods sold $$+$$ Net Profit
0%
Purchases $$+$$ Gross Profit
0%
Purchases $$+$$ Cash in hand
Explanation
Accounting Equation can be represented as:
Cost of Goods Sold=Opening Stock+Purchases+Direct Expenses-Closing Stock
Sales= Cost of Goods Sold + Gross Profit
Which of the following is not a capital profit?
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0%
Profit prior to incorporation of the company
0%
Profit from the sale of fixed assets
0%
Premium on issue of shares
0%
Compensation received on the termination of a contract
Explanation
Where consideration received by assessee was only towards termination of agency, income received by assessee was to be treated as business income and not as capital gain.
______________ assets are not taken into consideration under net asset method.
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0%
Current assets
0%
Fixed assets
0%
Fictitious assets
0%
Tangible assets
Explanation
Under net asset method, the value of all assets are added and liabilities to be deducted from the total of the assets to find out the purchase consideration.
For this calculation, fictitious assets are not to be added.
Fictitious assets are those assets which are not represented by anything concrete or tangible. There are no tangible properties behind such assets. Preliminary expenses, prepaid expenses are the examples of fictitious assets.
Interest on drawings to be treated is __________________.
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0%
Revenue Expenditure
0%
Capital Expenditure
0%
Revenue Income
0%
Capital Income.
Explanation
It is related to normal activities of the business Credited as revenue to Trading and Profit & Loss Account of the organisation.
Interest on drawings is the interest charged on day to day routine drawings made.
Since, it is the income of the firm of recurring nature it will be treated as revenue income.
Insurance received by the company is know as __________.
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0%
capital expenditure
0%
revenue expenditure
0%
capital receipt
0%
revenue receipt
Explanation
Capital Receipts - Receipts which are non-recurring (not received again and again) by nature and whose benefit is enjoyed over a long period are called "Capital Receipts". Capital receipts are non-business income and it arises independently, that are not considered as business income and is treated as capital gain.
Choose the wrong statement ___________________.
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Any expenditure which is unreasonably large is capital expenditure.
0%
Any expenditure intended to benefit the current period is revenue expenditure.
0%
Capital expenditure is any expenditure benefiting a future period.
0%
Amount paid for acquiring goodwill is capital expenditure.
Explanation
.
Amount spent on a advertisement campaign, the benefit of which is likely to last for three years is a _________.
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0%
capital expenditure
0%
revenue expenditure
0%
deferred Revenue expenditure
0%
none of these
Explanation
Any expenditure which gives the benefits to the business for a long time are termed as deferred revenue expenditure. Since, advertisement expenses benefit the firm for three years it will be treated as the deferred revenue expenditure.
Therefore, C is the correct option.
The expired portion of capital expenditure is shown in the ____________.
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0%
An expense
0%
An income
0%
An asset
0%
A liability
Explanation
An expired cost is a cost that has been recognised as an expense. This happens when a business entity fully consumes or receives benefit from a cost . An expired cost may also be construed as the total loss in value of an asset.
Expenditures incurred in normal course of business and whose benefit expires within the year is known as_____While______is that expenditure which results in acquisition of an assets or which results in an increase in earning capacity of business.
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0%
Capital expenditure, Revenue expenditure
0%
Revenue expenditure, Revenue expenditure
0%
Deferred revenue expenditure, Revenue expenditure
0%
Revenue expenditure, Capital expenditure
Explanation
A
revenue expenditure
is an amount that is expensed immediately—thereby being matched with
revenues
of the current accounting period.
which incurred in normal course of business.
Capital expenditure
or capital expense is the money a company spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. which result in an increase in earning capacity of business.
Profit can be classified as ______________.
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0%
Revenue
0%
Expense
0%
Asset
0%
Liability
Explanation
Profit describes the
financial benefit realized
when revenue generated from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity in question. Profit is calculated as total revenue less total expenses.
Therefore, A is the correct option.
Fee paid to a lawyer for checking whether all the papers are in order before land is purchased is______ But if later a suit is filed against the
purchaser, the legal costs will be_______________.
Report Question
0%
Capital expenditure, Revenue expenditure
0%
Revenue expenditure, Revenue expenditure
0%
Deferred revenue expenditure, Revenue expenditure
0%
Revenue expenditure, Capital expenditure
Explanation
Capital expenditure :-
Money spent by a business or organization on acquiring or maintaining fixed
assets, such as land, buildings, and equipment.
all expenses should be capitalised, which incurred until the process of acquisition of fixed asset not completed.
So here checking the papers of property is a type of expense which incurred during the process of acquisition of land.Therefore this expense fall under capital expenditure.
Generally, legal fees may be currently deductible as ordinary and
necessary business expenses.
This expenditure incurred after the acquisition of land. So this expense can not be capitalised.
So suit filed against the purchaser is revenue expenditure.
The main purpose of the incurring capital expenditure is to______of the business. The main
purpose of incurring revenue expenditures is to ______of the business.
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0%
Maintain earning capacity, improve the earning capacity
0%
Improve the earning capacity, maintain earning capacity
0%
Maintain earning capacity, maintain earning capacity
0%
Improve the earning capacity, improve the earning capacity
Explanation
A
revenue expenditure
is an amount that is expensed immediately—thereby being matched with
revenue
of the current accounting period., w
hich incurred in a normal course of business. (e.g. Expenditure on Repairs of machinery maintain the machinery to work in normal capacity)
Capital expenditure
or capital expense is the money a company spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. which result in an increase in earning capacity of the business. (E.g. Expenditure on upgradation improve the efficiency of machinery
)
Costs incurred to acquire an asset are__________but
costs incurred to keep them in working condition or to defend their ownership are__________.
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0%
Capital expenditure, Revenue expenditure
0%
Revenue expenditure, Revenue expenditure
0%
Deferred revenue expenditure, Revenue expenditure
0%
Revenue expenditure, Capital expenditure
The expired cost of a deferred revenue expense is known as ___________.
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0%
Asset
0%
Expense
0%
Liability
0%
Provision
Rs 10,000 spent on replacement of worn-out part of the machine will be charged as _______________.
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0%
Capital expenditure
0%
Revenue expenditure
0%
Revenue Growth
0%
Deferred revenue expenditure
Which of the following should not be called 'Sales'?
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0%
Office fixtures sold
0%
Goods sold for cash
0%
Goods sold on credit
0%
Sale of item previously included in 'Purchases'
Match List I with List II and select the correct answer using the codes given below the lists.
List I List II
A. Heavy advertisement expenses Capital expenditure
B. Travelling expenses of the salesman Revenue expenditure
C. Profit on the sale of office building Capital gain
D. Purchase of plant and machinery Deferred revenue expenditure
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0%
A- 4, B- 2, C- 3, D- 1
0%
A- 4, B- 2, C- 1, D- 3
0%
A- 2, B- 4, C- 3, D- 1
0%
A- 2, B- 4, C- 1, D- 3
Explanation
Heavy
amount spent for the
advertisement
of new company product is Deferred Revenue
expenditure
. Deferred Revenue
Expenditure
is an
expenditure
which is revenue in nature and incurred during an accounting period, but its benefits are to be derived in multiple future accounting periods.
Capital Expenditure
money spent by a business or organization on acquiring or maintaining fixed assets, such as land, buildings, and equipment.
Capital gain
is a rise in the value of a
capital
asset (investment or real estate) that gives it a higher worth than the purchase price.
A
revenue expenditure
is a cost that will be an expense in the accounting period when the
expenditure
takes place.
Which of the following portal revenue models involves charging for premium content?
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0%
ISP services
0%
General advertising
0%
Subscription fees
0%
Tenancy deals
Explanation
Portal revenue models involve charging for premium content is subscription fees. Hence, the correct option is C.
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Practice Class 10 Elements Of Book Keeping And Accountancy Quiz Questions and Answers
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