Advertisements
Advertisements
Question
What is revenue expenditure?
Advertisements
Solution 1
Expenditure by the government which does not create any assets for the government and does not reduce the liability of the government is called revenue expenditure. Hence, subsidies are treated as revenue expenditure as they do not reduce the liability of the government and do not add to the assets of the government.
Solution 2
- The expenditure incurred for day to day running of the business or for maintaining the earning capacity of the business is known as revenue expenditure.
- It is recurring in nature. It is incurred to generate revenue for a particular accounting period. The revenue expenditure may be incurred in relation to revenue or in relation to a particular accounting period.
- For example, the cost of purchases is a revenue expenditure related to sales revenue. Rent and salaries are related to a particular accounting period.
APPEARS IN
RELATED QUESTIONS
Is the following revenue expenditure or capital expenditure in the context of government budget? Give reason.
Expenditure on a collection of taxes.
Explain how taxes and government expenditure can be used to influence revenue expenditure and capital expenditure?
Which one of these is a revenue expenditure?
Is the following revenue expenditure or capital expenditure in the context of government budget? Give reason.
Expenditure on purchasing computers
Calculate investment expenditure from the following date about an economy which is in equilibrium :
National Income = 1000
Marginal propensity to save = 0.20
Autonomous consumption expenditure = 100
Calculate Autonomous Consumption Expenditure from the following data about an economy which is in equilibrium:
National income = 500
Marginal propensity to save = 0.30
Investment expenditure = 100
Giving reason, state whether the following is a revenue expenditure or a capital expenditure in a government budget:
Expenditure on scholarships
Giving reason, state whether the following is a revenue expenditure or a capital expenditure in a government budget:
Expenditure of building a bridge.
The government has started spending more on providing free services like education and health to the poor. Explain the economic value it reflects.
What is the difference between revenue expenditure and capital expenditure? Explain how taxes and government expenditure can be used to influence.
Answer the following question.
How are capital expenditure different from Revenue expenditure? Discuss briefly.
Distinguish between capital expenditure and revenue expenditure.
The Government of India has decided to vaccinate the adult population of India (with Covaxin/Covishield), without any charge. This would be categorized as ____________.
| S. No. | Content | Rs (in crores) |
| 1. | Revenue Expenditure | 100 |
| 2. | Capital Receipts | 40 |
| 3. | Net Borrowings | 38 |
| 4. | Net Interest Payments | 27 |
| 5. | Tax Revenue | 50 |
| 6. | Non-tax Revenue | 15 |
Which of the following shows fiscal deficit?
| S. No. | Content | Rs (in crores) |
| 1. | Revenue Expenditure | 100 |
| 2. | Capital Receipts | 40 |
| 3. | Net Borrowings | 38 |
| 4. | Net Interest Payments | 27 |
| 5. | Tax Revenue | 50 |
| 6. | Non-tax Revenue | 15 |
What will be the primary deficit?
Measure the level of ex-ante aggregate demand when autonomous investment and consumption expenditure (1) is Rs 50 crores, MPS is 0.2 and the level of income (Y) is Rs 4000 crores.
The government uses ______ as proxy for income of households to identify the poor.
Which one of the following is not a capital expenditure?
Identify the correctly matched pair of the items in Column A to those in Column B:
| Column A | Column B |
| 1. Revenue Expenditure | (a) Does not cause any reduction in government liability |
| 2. Capital Expenditure | (b) Which creates corresponding liability for the government |
| 3. Revenue Receipts | (c) Which causes a reduction in assets of the government |
| 4. capital Receipts | (d) Causes reduction in government liability. |
