Revenue Expenditures Quizlet Accounting

Are debited to asset accounts.

Revenue expenditures quizlet accounting. 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. Learn revenue expenditures with free interactive flashcards. Are additional costs of plant assets that do not materially increase the asset s life or its productive capabilities 2. Revenue expenditures are often discussed in the context of fixed assets.

Expenditure for purchasing floating assets i e assets meant for resale at a profit or for being converted into saleable goods such as the cost of goods raw materials and stores. Expenditures will be treated as revenue expenditures if it is incurred for the following purposes. Expenditures are classified into revenue expenditure and capital expenditure in accordance with the matching concept of accounting which stipulates that. Extend the asset s useful life 4.

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. The business expenditures are of two types capital expenditures revenue expenditures capital expenditures definition and explanation of capital expenditures. Revenue expenditure is expenditure which is expensed out in the period in which it is incurred. Which are incurred for meeting day today requirements of a business and the.

Choose from 222 different sets of revenue expenditures flashcards on quizlet. 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. Substantially benefit future periods 5. The following objectives are covered in this lesson.

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. An expenditure is a capital expenditure if the benefit of the expenditure extends to several trading years. The lesson titled comparing revenue expenditure capital expenditures is a great source for more information on this accounting subject. Revenue expenditure money spent to maintain assets and to operate the business day to day.

A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place. Are known as balance sheet expenditures 3.