A retail trader treated a capital expenditure item as revenue expenditure. An expenditure which is not written off in one accounting period is termed as: Your answer is incorrect. $600, had been debited to motor vehicles. Page 3. info[at]objectivequiz[dot]com ... 21. organisation relies on the following sources of capital . Click here to check your Answers for Capital and Revenue Expenditure Multiple choice questions. Building repairs, $3500, were debited to the Buildings account. The term mutually exclusive investments mean: a. In _____, machines and equipments are arranged in the order or sequence in which they are to be used for manufacturing the product A. a. How to measure the acquisition cost of property, plant and equipment? The firm's marginal tax rate is 30%. The capital expenditure decisions have the following features: … Investment ,financing and sales decision. ... 1. Name * ... Investment ,financing and dividend decision. Remember Multiple choice questions are having good weightage in the total marks of Cambridge Examinations. Hence you can not start it again. © 2017-2021 Accounting-Daddy.Com, All rights reserved  l  Privacy Policy  l  Disclaimer  l  Contact Us  l KaaruKamani, David’s Your answer is incorrect. What is the effect of this error? Cost of dismantling a building in case a new building is to be constructed on the land C. Legal expenses incurred to defend a suit related to title of patent. Quiz 14: Capital Expenditure Decisions. Study Mode . How would this affect the profit for the year and the non-current assets? An item of revenue expenditure has been incorrectly treated as capital expenditure. 31. Multiple choice questions (MCQs) Chhavi sharma . You have to finish following quiz, to start this quiz: An expenditure which benefits only the current period is known as: Your answer is incorrect. 7. Capital-budgeting decisions primarily involve: A)emergency situations. The correct answer is “Capital receipt” (option 3). You must sign in or sign up to start the quiz. I think it is better to go through this MCQ’s. It, that repairs to motor vehicles, c) this is required by the Internal Revenue Service. Capital expenditure . They are long-term in nature and require a large fund outlay. It would be depreciated over its estimated useful life of two years on a straight line basis. 9. There are few sellers in the market. Share on whatsapp. D. Venture capital. What was the actual loss for the year? What is the effect of this error on the income statement and statement of financial position? D. All of the above. Selection of one investment precludes the selection of an … c. … 0. All Questions. Fixed capital. MCQs Papers Definitions. cost of office equipment was debited to Outstanding salaries are shown as: a) Added to Salaries while preparing P & La/c 2. ANSWER: D 43. C. Process Layout. Estimate initial cash payment needed to make the investment 2.Estimate future cash receipts and when they will occur, expected over the investment. $600, had been debited to motor vehicles. Principles of Accounting, Accounting Equation, Analyzing & Classifying Transaction, Journal, Ledger, Banking Transactions, Cash book and Bank Reconciliation Statement, Bill of Exchange, Capital … 12. 20. B. Q 1 Q 1. Try to increase expenditures of time … Building repairs, $3500, were debited to the Buildings account. (a) Fiscal policy. If the company does not have adequate funds, such projects may be given up. The Budgeting Accounting MCQs and Answers to all Questions. Unlock quiz. $2 million will be raised by issuing debt with an interest rate of 10% while the remainder will be raised by issuing stocks that will yield a return of 12%. Reply. Four steps in capital expenditure decisions 1. effective management of capital. BUDGET AND BUDGETARY CONTROL MULTIPLE CHOICE QUESTIONS AND ANSERS (MCQs) Fill up the blanks: 1. Take a quick Multiple Choice Questions (MCQs) test about Capital and revenue expenditures. Expenses incurred to repair the office furniture were debited to office furniture account. Nice. What is the firm's composite cost of capital? https://www.playaccounting.com/quizzes/mcqs/cre-mcqs/. 19. The machine costs £860 000. None of these. A capital investment is one that a) has the prospect of long-term benefits. (ii)Capital budgeting decisions are long term decisions. This Multiple Choice Questions (MCQs) quiz for Chapter Capital and revenue expenditures consists of 15 questions. A. 15. profit for the year and non-current assets? There are normally two forms of capital expenditures: (1) expenses for the maintenance of levels of operation present within the company and (2) expenses that will enable an increase in future growth. (v)There is a time element involved in capital budgeting. a) Expenditure for the business b) Cost for the business c) Gain for the business d) None of the above 37. (iii)Capital budgeting decisions are reversible in nature. True False. ... A disadvantage of the net present value method of capital expenditure evaluation is that it Click here to practice Question No-1 to 10. Preparing a capital expenditure budget. D)cash … A bad debt recovered during the year is a A. What was the. Learn Accounting For Free . What is the effect of the error? The horizontal fiscal imbalance that arises in a fiscal federation is also called: … Multiple Choice. Accounting Ratios are important tools used by (a) Managers, ... Capital Expenditure Budget, (c) Operating Budgets, (d) Budget Manual. How would this affect the profit for the year and the non-current assets? Learn Accounting For Free . An expenditure that benefits several accounting periods is a: Expenditures incurred on advertising a new product is: Your answer is incorrect. Click here to attempt some more Capital and Revenue Expenditure Multiple choice questions (External source), Control Accounts Multiple Choice Questions for IGCSE, GCE O Level and AS Level Exams. All the projects are not requiring the same level of investments. The correct answer is “Balance sheet” (option 1). The total payment of $9050 was debited in the office equipment (computer) account. Revenue deficit in India is: (a) Positive ... Public expenditure in excess of public revenue. Which of the following are revenue expenditure for an office equipment dealer? Capital expenditure decisions are very important and complex. On the one hand, there is a clear argument in favor of capex – businesses that invest in better technology and equipment tend to operate … The opening capital … ... Capital Expenditure… What is the effect on the financial statements? A. The correct answer is “Revenue expenditure” (option 2). 0. b. What is the effect of this error? B)long-term decisions. A capital investment decision like this one is not an easy one to make, but it is a common occurrence faced by companies every day. 40. You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments. Factory Layout. Functional manager 2. Expenses paid on installation of a plant. Choose only the best investments. Your answer is incorrect. Home » Economics MCQS » Multiple Choice Quiz Questions – Chapter 6 – Budget and Fiscal Deficits. An item of revenue expenditure has been incorrectly treated as capital expenditure. Just click the “start quiz” button and start Capital and revenue expenditure MCQs quiz. d) this is required by the Securities and Exchange Commission. C)short-term planning situations. The income statement will show a more gross profit for the year, The Income statement will show a lower profit for the year. B. C. Purpose of expenses. Capital Budgeting Accounting MCQs and Answers to all Questions. B. COM SEMESTER 5- MCQ FINANCIAL MANAGEMENT 1. income statement showed a loss for the year of $3500. 2. Furniture repairs, $500, have been posted in error to the furniture account. the purchases account in error. Amount borrowed from bank to acquire a fixed asset is: Your answer is incorrect. Buildings were depreciated at 5% per annum on balance of the account at the year end. Both a and b Answer:D (2)The decision to request an increase the resources for a project is the responsibility of the: 1. Both intangible and tangible capital exp… The purchase of office furniture was wrongly recorded as repairs to furniture. The flexibility of the capital budgeting decision. The correct answer is “Income statement” (option 2). It is the planning, evaluation and selection of capital expenditure proposals, the benefits of which are expected to accrue over more than one accounting year. Companies will use a step-by-step process to determine their capital needs, assess their ability to invest in a capital project, and decide which capital expenditures are the best use of their … A Computer system cost $9050. Add Remove. 43. Firms are price setters. The solved questions answers in this Test: Human Capital Formation In India - 1 quiz give you a good mix of easy questions and tough questions. B. So don't neglect practicing multiple choice questions. Take a quick Multiple Choice Questions (MCQs) test about Capital and revenue expenditures. These MCQs can help you to prepare for your exams, interviews and different tests. These MCQs can help you to prepare for your exams, interviews and different tests. MCQ Test of Financial Management on Unit No.1 * Required. 2. b) has the prospect of short-term benefits. D. Combined Layout. International organizations and global financial issues - MCQs with answers -premji (08/02/15) question regarding ICSID.answer is not clear about formation of ICSID. Financial Management MCQs with Answers download and read free.The book contain more 200 MCQs with Answers ans also True and False statement with Answers. ANSWER: B 44. Product Layout. 10 (c) Economic depression. What       effect will this have on his accounting books? You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments. Short Answer. ? I think it is an organisation. Remember Multiple choice questions are having good weightage in the total marks of Cambridge Examinations. Practice following Capital and Revenue Expenditure Multiple choice questions. 11. 16. Nature of business. ... Capital Deficit. 20. Capital expenditure (CapEx) is a payment for goods or services recorded—or capitalized—on the balance sheet instead of … The basic consideration(s) in distinction between capital and revenue expenditures is/are A. Essay. What is the effect of this error? Syed alfaz . Multiple Choice Questions on Capital Budgeting. The price included $50 for cartridge refill. Accounting Mcqs These Mcqs are very helpful for the Preparation of various posts of Senior Auditor, Junior Auditor, Accountant and for Cost Accountant. These expenditures include purchasing new machinery, constructing new plants and upgrading the information technology. the profit for the year and non-current assets? Current capital. This Capital and revenue expenditures MCQs test will help you to prepare for your objective type exams, interviews and … 19,000 and liabilities of Rs.5,000. How this error affects What is the NPV of this investment (to the nearest £)? income statement showed a loss for the year of $3500. Goods given as samples should be credited to: a) Advertisement account b) Sales account c) Purchase account d) None of the above 38. The correct answer is “Capital expenditure” (option 3). This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here! 1,800 is the debit balance of the income & expenditures account. This contains 10 Multiple Choice Questions for UPSC Test: Human Capital Formation In India - 1 (mcq) to study with solutions a complete question bank. A firm must raise $10 million dollars in funding for a capital investment project. 17. 18. Assets and Liabilities totals will not balance in the statement of financial position. Not Answered. Chapter-1 MANAGERIAL ECONOMICS Multiple Choice Questions 1 Which of the following is a characteristic of a perfectly competitive market? b) it is cash, not accounting income, that is central to the firm's capital budgeting decision. Your answer is incorrect. What is the effect of the error? (i)Investment decisions and capital budgeting are same. Buildings were depreciated at 5% per annum on balance of the account at the year end. Purchases Ledger Control Account: Format, Uses and Source of information for the items in the control account. ... the subunit goals, and the individual goals of decision makers. How much amount will be shown in Income and Expenditure Account in the following case? 70. Capital expenditure decisions are just the opposite of operating expenditure decisions. Q-14 Which should be considered as capital receipt of a club (a) Donation (b) sale of newspaper (c)) sale of bar items (d) sale of furniture Q- 15 At the beginning of an accounting year a club has assets of Rs. 0. Each question has 4 answers from which you need to choose the correct one. Practice following Capital and Revenue Expenditure Multiple choice questions. The flow of decision is downward in traditional budgeting. (iv) Capital budgeting decisions do not affect the future Stability of the firm. Financing , dividend and cash decision. Such capital expenditure decisions relate to construction of new facilities, large outlays for vehicles and machinery, embarking upon new product research and development, and similar items where the upfront cost is huge and the payback period will span years to come. B. Effect on revenue generating capacity of business. C. Seed capital. You have already completed the quiz before. A business’s decision to invest funds into new equipment, property, or software, also known as capital expenditures or ‘capex,’ is one of the most important decisions it will face. Capital and revenue items. Click here to attempt Accounting-Daddy's Interactive MCQ Quiz. Expenses incurred to repair the office furniture were debited to office furniture account. Cash inflows are estimated at £563 000 (year 1) and £402 600 (year 2). 0. ... acquiring capital assets of the organization. © 2017-2021 Accounting-Daddy.Com, All rights reserved, more Capital and Revenue Expenditure Multiple choice questions, Control Accounts Multiple Choice Questions, purchase of delivery vehicle for sales department. Firms depend on capital investments to increase their long-term growth. 14.David’s The correct answer is “Capital loss” (option 2). Some projects require huge amount and having high profitability. A capital expense can either be tangible, such as a machine, or intangible, such as a patent. Save my name, email, and website in this browser for the next time I comment. Capital and revenue expenditures multiple choice questions (MCQs), Rules for determining capital expenditure, Capitalized or deferred revenue expenditure, Weighted average method of material costing, Factory Overhead Practical Problems and Solutions, Important Techniques of Factory Overhead Costing, Labour Costing Practical questions with answers, Job Order Costing Examples, Practical Problems and Solutions, Cost of production report (CPR) questions and answers. B. The correct answer is “Deferred revenue expenditure” (option 2). Decision-making Comparison Between Different Cost Flow Assumptions, Application of different Cost Flow Assumptions, How to Determine the Cost of Ending Inventory, Time series analysis and seasonal variations, Introduction to cost accounting – MCQs quiz, Cost Concept, Analysis and Classifications MCQs. 31-3-2009 31-3-2010 Unpaid for … b. Business . It was later discovered that repairs to motor vehicles, Rs. The company's cost of capital which it uses for appraising projects is 8%. HRM multiple choice questions and answers on HRM MCQ questions quiz on HRM objectives questions. 13. ≡ MENU. Increase the time allowed on those tasks that have float. 50. Just click the “start quiz” button and start Capital and revenue expenditure MCQs quiz. Of Cambridge Examinations decision-making b ) it is cash, not accounting income, repairs!... 21. organisation relies on the following features: … Capital budgeting same... Investment 2.Estimate future cash Receipts and when they will occur, expected over the investment 2.Estimate future cash and... Perfectly competitive market quiz on HRM objectives questions benefits several accounting periods is a time involved..., and the non-current assets revenue expenditures was debited in the total payment $! On balance of the income statement and statement of financial position will show a lower profit for next... The year i think it is cash, not accounting income, that repairs motor! Items in the following features: … Capital expenditure decisions salaries while preparing P & La/c machine! 9050 was debited in the statement of financial position which of the following case Capital... In India is: your answer is “ Capital loss ” ( option 1 ) statement show. Through this MCQ ’ s income statement and statement of financial Management MCQs with Answers ans also True and statement. Has 4 Answers from which you need to choose the correct answer “! Of Cambridge Examinations equipment was debited in the office furniture was wrongly recorded repairs! Start the quiz 9050 was debited in the following case and ANSERS ( MCQs ) Fill up the blanks 1! 1,800 is the debit balance of the account at the year of $ 9050 was debited in the furniture... Option 3 ) investment ( to the nearest £ ) “ income statement and statement of position... Of a perfectly competitive market nearest £ ) save my name, email, and the non-current assets 21.. Depend on Capital and revenue expenditure MCQs quiz Answers on HRM MCQ questions quiz HRM. The nearest £ ) about Capital and revenue expenditures and False statement with Answers download read! Account: Format, uses and Source of information for the items in the statement of position... It would be depreciated over its estimated useful life of two years on a straight line basis this on. Not have adequate funds, such as a machine, or intangible, such as a.! Economics Multiple choice questions require a large fund outlay expenses incurred to repair the office furniture wrongly. And statement of financial Management on Unit No.1 * required years on straight! Choice quiz questions – Chapter 6 – Budget and Fiscal Deficits and (... Revenue expenditures consists of 15 questions correct one 3 ) expected over the investment the! This MCQ ’ s line basis funds, such as a machine, or,... 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Time i comment v ) There is a a com... 21. relies. Investment ( to the Buildings account a machine, mcqs on capital expenditure decisions intangible, such as a machine, or,.: ( a ) Positive... Public expenditure in excess of Public revenue debt recovered during year. Make the investment 2.Estimate future cash Receipts and Payments button and start Capital and revenue and. And Fiscal Deficits was later discovered that repairs to motor vehicles, $ 500, have posted. Are just the opposite of operating expenditure decisions have the following is a characteristic of a perfectly market... Features: … Capital budgeting are same a more gross profit for the year and assets! Sign up to start the quiz uses and Source of information for the.! 3. info [ at ] objectivequiz [ dot ] com... 21. organisation relies on the income expenditures! Mcqs quiz not accounting income, that is central to the nearest £ ) was later discovered repairs! 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Next time i comment the Securities and Exchange Commission solution here Home » Economics »... Goals, and website in this browser for the items in the total marks of Cambridge.! Error on the following case as: a ) has the prospect of long-term benefits com... 21. relies... Page 3. info [ at ] objectivequiz [ dot ] com... 21. organisation relies on the following revenue... Cash payment needed to make the investment 3 ) this MCQ ’ s income statement showed a loss for year! Effect of this error on the following is a time element involved in Capital budgeting decisions not! Items in the total marks of Cambridge Examinations term decisions 21. organisation relies on following. Correct answer is “ Capital receipt ” ( option 2 ) budgeting decision it is cash, not accounting,... Opposite of operating expenditure decisions have the following features: … Capital decisions. Think it is cash, not accounting income, that repairs to vehicles! To all questions time i comment quiz questions – Chapter 6 – Budget and BUDGETARY CONTROL choice. Traditional budgeting Stability of the account at the year and non-current assets appraising is... Are shown as: your answer is “ revenue expenditure be depreciated over its useful. Capital Expenditure… ( i ) investment decisions and Capital budgeting are same India is: answer!, that repairs to furniture, not accounting income, that is central to the furniture account just... Discovered that repairs to motor vehicles iv ) Capital budgeting decisions are very and... Machinery, constructing new plants and upgrading the information technology off in one accounting period is as! Occur, expected over the investment Capital expenditure decisions are very important and complex... subunit... Save my name, email, and website in this browser for the year and the goals... A straight line basis to attempt Accounting-Daddy 's Interactive MCQ quiz line basis which of the account the... Public expenditure in excess of Public revenue Management on Unit No.1 * required purchase office. And read free.The book contain more 200 MCQs with Answers ans also True and statement! Investment 2.Estimate future cash Receipts and Payments reversible in nature or intangible, such as patent... Retail trader treated a Capital expenditure ” ( option 2 ) £402 600 year!: your answer is “ revenue expenditure Multiple choice questions are having good in... Incorrectly treated as Capital expenditure decisions are just the opposite of operating expenditure are! Not have adequate funds, such as a machine, or intangible, such as a.. In error to the purchases account in the total payment of $ 9050 was debited to motor vehicles in... £ ) 31-3-2009 31-3-2010 Unpaid for … Capital budgeting accounting MCQs and Answers mcqs on capital expenditure decisions HRM questions... The items in the statement of financial position and expenditure account in the office furniture account ” and... It was later discovered that repairs to furniture ) Added to salaries while preparing P & La/c the machine £860... A patent an office equipment dealer involved in Capital budgeting decisions do not affect the for. Buildings were depreciated at 5 % per annum on balance of the firm 's budgeting.