Mgt101 GDB Fall 2011 Solution - Last Date 3 Nov 2011
Thursday, November 03, 2011 Posted In MGT Edit This“Mr. Ali has started a new business in current year 2011. For his business, he has purchased a building, office furniture and fixtures. He has paid insurance premium of the building for the financial year 2011 and also incurred the advertisement expenses. Transportation charges have also been paid for the furniture he purchased. Salaries have also been paid during the year. Along with all these activities, Mr. Ali has purchased a car for his personal use only.
Required:
Identify at least two capital and two revenue expenditures from the above given scenario.”
Note: Your comments should not be more than 40 words.
Solution:
Capital expenditures are:
1. Office furniture and fixtures
2. cost of car
Revenue expenditures are:
1. Salaries
2. Insurance premium
3. Transportation charges
4. Advertisement expenses
Another Solution:
Capital expenditure
1-building
2-office furniture and fixtures
Revenue expenditure
1-Transport charges which had paid for furniture
2-Salaries have also been paid during the year2011
Another:
Capital Expense
Building for Office because if is a fixed asset and fixed assets are counted as Capital Expenses, Furniture is also treated as asset of the business
Revenue Expense
Advertisement Expense because it will generate revenue for the company, Insurance Premium because it will also payback some larger amount of money
