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Wednesday, March 17, 2010

Revenue Expenditure

Those expenditure which are done to operate the business are revenue expenditures. The benefit of such expenses is to utilized in an accounting period. Nature of revenue is repetitive and may incur so many time during the business life. The examples of revenue expenditures are as follows.

1. Expenditures incurred in the normal course of business:
  • Rent, wages, salaries, advertising, legal expense, taxes, insurance premium, fuel, water, lighting, heating, bank charges, telephone, postage, stationery etc.
  • Interest, commission, discount, depreciation, bad debts etc.
2. Expenditures incurred to purchase raw materials or resale goods:
  • Cost of trading (resale) goods.
  • Cost of raw material.
  • Consumable stores.
3. Expenditure incurred to maintain fixed assets for working condition:
  • Repairs and renewals of fixed assets.
  • Replacement of fixed assets.

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