MGT101 GDB Idea
“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.”
Capital Expenditure are those who creat an asset that helps in generating future income and its life is more than 12 months.
in the above scenario capital expenditures are:
1-building
2-office furniture and fixtures
Revenue Expenditure are day to day expenses whoes benefits are drawn immediately these are actually cost of resources consumed.
in the above scenario revenue expenditiures are:
1-a car for his personal
2-Salaries have also been paid during the year2011
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