Which of the following is a revenue expenses?
Correct answer: A. Raw material consumed
- A. Raw material consumed
- B. Plant purchased
- C. Long term loan raised from bank
- D. Share Capital
Explanation
Raw material consumed is used in producing goods during the current accounting period, so its cost is a revenue expense. Plant is a long-term asset, while a loan and share capital are sources of finance rather than expenses.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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