Revenue Expenditure With Examples

Smaller scale software initiative or subscription.

Revenue expenditure with examples. Meaning of revenue expenditure. Examples of revenue expenditure. Routine repair update costs on equipment. Repair of machinery building furniture etc.

But the range is wider than that. Cost of goods sold. When you make or sell a product or offer a service the proceeds you receive from product sales or services are called revenue or income. However such expenses are not stated on the company s balance sheet.

For example take a quick look at this excerpt of income statement below to understand the accounting treatment of revenue expenditure better. Their primary revenue is from services provided to customers. Chartered accountants law consultants barber shops software professionals etc. One of the examples of revenue expenditure which could serve as a contrast to the capital expenditures is that of depreciation done on an annual basis on a capitalized asset.

Unless you re an accountant who is also a small business owner accounting terms can be confusing. For service provider businesses for example. Many businesses for example manufacturing grocery stores retail stores etc. All expenses incurred in the ordinary conduct of business such as rent salaries wages manufacturing expenses carriage commission legal charges insurance and advertisement free samples salaries postage expenses etc.

All of the following are examples of revenue expenditures. Their primary revenue is actually from sale of products goods. The initial expenditure on the machinery would be a capital expenditure and would be reported on the balance sheet at the amount paid to acquire it. Rent on a property.

Examples of revenue expenditures. 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. 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. Examples of revenue and capital expenditures.

Following are the examples of revenue expenditure. 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. Furthermore as per the matching principle the expense should be matched with the revenue earned during the period to be regarded as revenue expenditure. Following are the important items of revenue expenditure.