Question

An expenditure is Revenue expenditure if ______.

Options

• It neither affects liabilities nor assets.

• It either affects liabilities or assets.

• Either It neither affects liabilities nor assets or It either affects liabilities or assets.

• None of these.

Answer 1

An expenditure is Revenue expenditure if it neither affects liabilities nor assets.

Explanation:

An expenditure that neither creates assets nor reduces liability is called Revenue Expenditure, such as employee salaries, interest payments on past debt, subsidies, pensions, etc.