Chapter-4: Capital and Revenue Transactions: MCQ

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)]