Which of the Following Ordinarily Would Be Treated as a Revenue

question 78

Multiple Choice

Which of the following ordinarily would be treated as a revenue expenditure rather than a capital expenditure?

• A) Repair and maintenance on buildings
• B) The replacement of a major component of a building
• C) An addition to an existing building
• D) Rearrangement costs that are identifiable,material,and are expected to provide discernable future benefits

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Definitions:

Net Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health.

Short-term Bank Loan

A loan borrowed from a bank with a repayment period typically less than one year, often used for immediate liquidity needs.

Fixed Assets

Long-term tangible assets that are used in the operations of a business, such as machinery, buildings, and equipment, and are not expected to be converted into cash in the current or upcoming fiscal year.

Long-term Bank Loan

A loan provided by a banking institution with a repayment period extending beyond one year, typically used for financing significant business investments or acquisitions.