Question

Explain any two types of Expenses.

Answer 1

1. Revenue Expenses: These are recurring expenses incurred during the organization’s daily activities. Their benefit is utilized during the current accounting year. They do not lead to the acquisition of any fixed assets.
   Examples: Salaries and wages, rent, energy and phone bills, printing and stationery, insurance, repairs and maintenance, audit fees, postage and telegrams.
2. Capital Expenses: These are non-recurring expenses incurred to buy fixed assets or increase the organization’s earning capability. Their benefits last several accounting years.
   Examples: Purchase of buildings, plant and machinery, furniture, automobiles, library books, and sports equipment; major repairs to extend the life of an asset.