Journal Entry For Revenue Expenditure

Examples of such expenses are wages rent power bad debts depreciation telephone printing cost.

Journal entry for revenue expenditure. Capital expenditure balance sheet items revenue expenditure profit and loss statement items. Expense journal entry forms a significant part of. Definition of revenue expenditure a revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place. Expenditures are classified into revenue expenditure and capital expenditure in accordance with the matching concept of accounting which stipulates that.

All journal entries construct financial statements and help in financial analysis and decision making. Journal entries are the base of accounting. Fy 2019 2020 journal entry for. The revenue expenditures take place after a fixed asset had been put into s.

Revenue expenditure during the normal course of business any expenditure incurred of which benefit is received during the same accounting period is called revenue expenditure. Revenue expenditure is expenditure which is related to the trade of the business or spent on repairing and maintaining non current assets in order that they can continue to be used in the business. Revenue expenditure incurred on fixed assets include costs that are aimed at maintaining rather than enhancing the earning capacity of the assets. These expenses help a business sustain its operations and may not result in an increase in revenue.

It is not recorded as an asset on balance sheet because it is expected to benefit the company only in the period in which it is incurred. Revenue expenditure is expenditure which is expensed out in the period in which it is incurred. Revenue expenditures are often discussed in the context of fixed assets. These are costs that are incurred on a regular basis and the benefit from these costs is obtained over a relatively short period of time.