Revenue Expenditure Examples Upsc

So on the same logic if devanand gives khairaat to someone outgoing money then we must put it under revenue expenditure.

Revenue expenditure examples upsc. Meaning of revenue expenditure. The interest paid by the government of india on all the internal and external loans does not produce any assets so it is revenue expenditure. Revenue expenditure is referred to as the expenditure incurred by an organisation to manage the day to day functions of a business which can include employee wages inventory rent electricity insurance stationery postage and taxes. It is a cost that will be expensed in the accounting period that the purchase was made.

Salaries of employees interest payments on past debts grants given to state governments etc. Specific examples are discussed below. Furthermore as per the matching principle the expense should be matched with the revenue earned during the period to be regarded as revenue expenditure. For example if company a spends 1 000 per month on updates for a key piece of software used by each team member each month then the 1 000 is a revenue expenditure in.

The revenue deficit refers to the excess of government s revenue expenditure over revenue receipts. Revenue expenditure also includes the expenditure incurred for the purchase of raw material and stores required for manufacturing saleable goods and the expenditure incurred to maintain the fixed assets in proper working conditions i e. Revenue expenditure is expenditure for normal running of the government department and various services interest charges on debt incurred by government subsidies and so on. If the expenses made by the firm helps in the generation of revenue for the current accounting period it is considered as an operational expense.

Repair of machinery building furniture etc. The salaries and pension paid by the government to government employees is needed to run the government s business. Revenue expenditure refers to those expenditures which are incurred during normal business operation by the company benefit of which will be received in the same period and the example of which includes rent expenses utility expenses salary expenses insurance expenses commission expenses manufacturing expenses legal expenses postage and printing expenses. From the 1997 98 budget the practice of showing budget deficit has been discontinued in india.

The most important difference between capital expenditure and revenue expenditure is that the former is aimed at improving overall earning capacity of the concern whereas the latter tries to maintain the earning capacity. If your revenue expenditure was made in june you ll expense it in june s report. Following are the examples of revenue expenditure. Budget deficit refers to the excess of total expenditure both revenue and capital over total receipts both revenue and capital.

Khairaat given grants aid charity previously we saw that if unesco asi foreign ngo gives khairaat to devanad incoming money we put under non tax revenue receipt. Unlike loans the grant aid charity cannot recovered after 10 20 years therefore its short.