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What happens when a capital expenditure is treated as revenue expenditure?
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∙ 10y ago
Expenses are overstated and assets are overstated
Kianna Gislason
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What happens when a capital expenditure is treated as a revenue expenditure?
Expenses are overstated and assets are overstated
If a capital expenditure is treated as a revenue expenditure then?
Now, if a capital expenditure is treated as a revenue expenditure, then the expenses would be overstated and also the Fixed assets would be overstated
Explain revenue expenditure?
Expenditures will be treated as revenue expenditures if it is incurred for the following purposes:Expenditure for purchasing floating assets i.e., assets meant for resale at a profit or for being converted into selling goods, such as the cost of goods, raw materials and stores.Expenditures incurred by maintaining assets in proper working order e.g., repairs to plant and machinery, building furniture and fittings etc.Expenditures incurred for meeting day to day expenses of carrying on a business e.g., salaries, rent, rates, taxes, stationery, postage etc.All revenue expenditures have to be deducted from the income earned by the firm. That is to say, all revenue items will be taken to the profit and loss account.
How interest on capital treated in cost accounting?
it should be ignored
Why capital is treated as a liability?
capital is an amount invested by the proprietor, according to separate entity concept owner is different from the company so, capital is treated as liability.
What happens when capital expenditure is treated as revenue expenditure?
Expenses are overstated and assets are overstated
What happens when a capital expenditure is treated as a revenue expenditure?
Expenses are overstated and assets are overstated
If a capital expenditure is treated as a revenue expenditure then?
Now, if a capital expenditure is treated as a revenue expenditure, then the expenses would be overstated and also the Fixed assets would be overstated
What is the effect on wrong treated revenue expenditure as capital expenditure?
The effects it would has on net profit and net asset is that there would be an increase in net profit and an increase in net asset as well
What is the effect on wrong treated capital expenditure as revenue expenditure?
The effects it would has on net profit and net asset is that there would be an increase in net profit and an increase in net asset as well
Can expenditure incurred for defence of title of a capital asset be treated as capital expenditure?
Introduction expenditures
Dividend account is treated as either asset account liability account or expense account?
Hi, Dividends are paid out of retained earnings (part of Capital) therefore I think Dividends can not be treated as an expense (the prudence being increase in Capital can not be treated as Revenue thats Cash generation while dividends are Surplus appropriation). regards, Zeeshan
What is journal entry for Accrued Revenue?
Accrued Revenue is a term that I rarely see, though it is an Asset and should be treated as such. Accrued Revenue would be treated similar to an Account Receivable. The Journal Entry would be a Debit to Accrued Revenue and a Credit to Revenue.
Minimum amount of expenses which should be treated as capital expenditure?
Costs that proceed a benefit, new assets that have substantial life, improvements that prolong the life of property, and adaptions that permit the property be used for new or different purpose are considered capital expenditures. In a nut shell, they are all initial cost with long term profitable results.
This country has its capital on the river Danubewater from Danube has to be treated before it is drinkable?
this country has it's capital on the river Danube . water from the Danube has to be treated before it is drinkable.
Is share asset or liability?
Share is treated as liability. It is not treated as asset. shares is called as share capital. capital is entered in the liabilities side of the balance sheet.
What happens if impetigo is not treated?
you die
