Question

Sharma and Company is planning to spend 5,00,000 on advertising. Under which type of expense can it be classified?

Options

• Capital expenditure

• Revenue expenditure

• Capital receipts

• Deferred Revenue expenditure

Answer 1

Revenue expenditure

Explanation:

Revenue fees are costs a business incurs to operate on a daily basis. Most of the time, these costs are paid within one financial period, usually a year. Advertising is a normal part of running a business and is done to boost sales.