Question

Select the most appropriate answer from the alternatives given below and rewrite the sentence.
Purchase of stationery is an _______________ expenditure.

Options

• capital

•  revenue

• long-term

• deferred revenue

Answer 1

Purchase of stationery is a revenue expenditure.

Explanation: Stationery is treated as consumable good, as it is used up during the year. The amount of stationery consumed during the year should be debited to Income and Expenditure Account. It is a type of revenue expenditure.  

The amount consumed is calculated as,
Opening stock
Add: Purchases made during the year
Less: Closing stock