Which of the following is not a revenue expense?
Correct answer: D. Cost of accessories of motor vehicles spent at the time of purchase
- A. Cost of raising a loan
- B. Insurance premium paid at the time of registration of the ship
- C. Expenses incurred for laying of sewers on land purchased
- D. Cost of accessories of motor vehicles spent at the time of purchase
Explanation
Accessories purchased and fitted when a motor vehicle is acquired add to the vehicle’s cost, so they are capital expenditure. Loan costs, sewer construction on purchased land, and ship insurance are treated as revenue expenses in this context.
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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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