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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
MCQ
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Solution
Deferred Revenue Expenditure
Explanation:
A large one‑time advertising outlay (₹ 5,00,000) will give benefits over several future years, so it is treated as deferred revenue expenditure and written off over the period of expected benefit.
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