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GCE Financial Accounting 1990 Question 7

Question 7

Capital and Revenue Expenditure

Which of the following is not true of revenue expenditure? I. It is incurred in one period of account, II. Its full benefits are consumed in the period incurred; III. It includes items for replacement and repairs; IV. It does not include depreciation.

  1. A.I only
  2. B.I and II only
  3. C.II only
  4. D.III only
  5. E.IV only.
Show the answer and explanation

Answer: E (IV only.)

Explanation

Depreciation is a revenue expense charged to profit and loss, so statement IV is false.