Revenue Expenditures Accounting Quizlet

Learn revenue expenditures with free interactive flashcards.

Revenue expenditures accounting quizlet. Revenue expenditures consist of those expenditures which are incurred in the normal course of business. Unlike capital expenditures these are not carried forward to future years. They are incurred in order to maintain the existing earning capacity of the business. Revenue expenditures are often discussed in the context of fixed assets.

The following objectives are covered in this lesson. Revenue expenditure is expenditure which is expensed out in the period in which it is incurred. The benefit of the revenue expenditures is received in the same accounting year. Expenditures are classified into revenue expenditure and capital expenditure in accordance with the matching concept of accounting which stipulates that.

Revenue expenditure money spent to maintain assets and to operate the business day to day. All the expenditures which are incurred in the day to day conduct and administration of a business and the effect of which is completely exhausted within the current accounting year are known as revenue expenditures these expenditures are recurring by nature i e. 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. Choose from 222 different sets of revenue expenditures flashcards on quizlet.

A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place. These are recurring in nature and are allocated to the profit and loss account of the same year. Which are incurred for meeting day today requirements of a business and the. These expenses tend to be recurring in nature and decrease profit for the year and in turn decrease equity and will affect the income statement.

In other words revenue expenditures are extra expenses incurred because of an asset but they don t add any additional value to the asset or increase its. Revenue expenditure refers to expenses incurred in the day to day running of the business. A revenue expenditure also called an income statement expenditure is a cost related to assets that are not capitalized because they will not provide a financial benefit in future periods.