Chapter-4: Capital and Revenue Transactions
Exercise
Multiple-choice Questions(MCQ)
1. Which one is the Capital Expenditure?
[a] Capital invested by the owner
[b] Selling expense for machine
[c] Machine purchased
[d] Daily expenses to operate business
2. If capital expense is recorded as revenue expense then which
calculation will be wrong?
[a] Bank balance
[b] Debtors
[c] Creditors
[d] Net profit
3. Capital expenditure –
i. Car purchased for sale
ii. Machine purchased for business use
iii. Road tax and insurance premium of delivery van
Which one is correct of the following?
[a] i & ii
[b] ii & iii
[c] i & iii
[d] i, ii & iii
4. Sale of machine of machine merchandising business –
[a] Capital receipt
[b] Capital income
[c] Revenue income
[d] Revenue receipt
5. Ramjan Mia import goods for his business. Import duty of goods
is –
[a] Capital expenditure
[b] Revenue expenditure
[c] Non-trading expenditure
[d] Revenue income
6. Shukomol Borua purchased a land for his business. He paid
tk.5,000 for land’s registration. This registration expenses is –
[a] Revenue expenditure
[b] Capital expenditure
[c] It can be both capital and revenue expenditure
[d] Deferred revenue expenditure
7. In comprehensive income statement we record -
i) Revenue receipt
ii) Revenue income
iii) Capital expenditure
Which one is correct of the following?
[a] i & ii
[b] ii & iii
[c] i & iii
[d] ii
8. In statement of financial position we record
i. Capital receipt
ii. Revenue expenditure
iii. Deferred Revenue expenditure
Which one is correct of the following?
[a] i
[b] i& ii
[c] ii & iii
[d] i & iii
9. What type of transaction is Freight in word-
[a] Revenue
[b] Capital
[c] Deferred revenue
[d] Operating
10. Deferred Revenue expenditure ----
i) Paid tk.1,00,000 to
Adv. Firm for publicity of goods for 3 years
ii) Paid rent in advance
for 3 months tk.15,000
iii) Cost of Business
transfer cost tk.25,000 from Dhanmondi to Motijheel
Which one is correct of the following?
[a] i
[b] i& ii
[c] ii & iii
[d] i & iii
Considering the following information answer the questions no. 11,
12 &13:
On 1 January 2008 Mr. Plabon Voumik purchased a machinery for his
business valued tk.40,000 and paid for its installation tk.5,000. He sold this
machinery for tk.25,000 in 2011, At this time remaining price of this machinery
was tk.24,000 after deducting depreciation.
11. Amount spent tk.45,000 of Plabon Voumik considered as -
i) Capital receipt
ii) Capital expenditure
iii) Deferred Revenue
expenditure
Which one is correct of the following?
[a] i
[b] ii
[c] i & ii
[d] ii & iii
12. What was the total amount of depreciation charged in 4 years?
[a] tk. 15,000
[b] tk. 16,000
[c] tk. 20,000
[d] tk. 21,000
13. The difference between selling price and present book value of
machinery is called.
[a] Capital income
[b] Revenue income
[c] Revenue receipt
[d] Capital receipt
[Answer
key: 1(c), 2(d), 3(b), 4(d), 5(b), 6(b), 7(b), 8(d), 9(a), 10(b), 11(b), 12(d),
13(a)]