Question

Which of the following payments are included under Revenue Expenditure?

Options

• Investment in shares and acquisition of land

• Interest payments and grants given to state governments and other parties

• Loans and advances to Union Territories

• Purchase of machinery and equipment

Answer 1

Revenue Expenditure includes interest payments and grants given to state governments and other parties. Since grants and interest payments do not create assets or reduce liabilities, they are classified as revenue in nature.