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Question
Which one of these is a revenue expenditure?
Options
Purchase of shares
Loans advanced
Subsidies
Expenditure on acquisition of land
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Solution
Subsidies
Explanation:-
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
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