Question No 04 Chapter No 17

Question No 04 Chapter No 17

04. State by Giving reasons whether the following items of Expenditure are capital or Revenue.

  1. Purchased raw- materials for Rs 1,00,000
  2. Rs 2,00,000 paid to Govt. as excise duty.
  3. Legal expenses incurred in connection with the issue of Capital
  4. Legal expenses incurred by the company for income-Tax appeal Rs 15,000
  5. Legal expenses incurred to prevent the misuse of our trade- mark Rs 10,000
  6. Legal expenses incurred in connection with raising a loan for the business
  7. A sum of Rs 5 lac was paid for the purchase of an agriculture farm. Annual land revenue paid Rs 10,000
  8. Damages paid on account of breach of contract Rs 20,000
  9. Sold off an obsolete machine having book value of Rs 15,000 at 3,000
  10. Rs 50,000 paid as wages to the workers

The solution of Question No 04 Chapter No 17: –

iIt is a Revenue Expenditure and will be Debited to Purchases Account because the expenses have been incurred on the repair of existing Machines. It is an expenditure of routine nature.
iiIt is a Revenue Expenditure and will be Debited to Govt. Excise duty Account because the expenses have been incurred on the repair of existing Machines. It is an expenditure of routine nature.
iiiIt is a Capital Expenditure and will be Debited to Issue to shares Account
ivIt is a Revenue Expenditure and will be Debited to Income Tax Account because it is an expenditure of routine nature.
vIt is a Revenue Expenditure and will be Debited to Income Tax Account because it is an expenditure of routine nature.
viIt is a Capital Expenditure and will be Debited to Trade-mark Account
vii5 lac is the Capital Expenditure and Rs 10,000 is the Revenue Expenditure
viiiIt is a Revenue Expenditure and will be Debited to Damages Account because it is an expenditure of routine nature.
ixRs. 12,000 is the Revenue Expenditure
xIt is a Revenue Expenditure and will be Debited to Income Tax Account because it is an expenditure of routine nature.

The provision in accounting: Types and Treatment

Also, Check out the solved question of all Chapters: –

D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

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ISC Accounts 11 20 Image min 197x300 - Question No 04 Chapter No 17 - D.K Goal 11 Class
D K Goel accountancy +1 – ISC_Accounts_11_20_ImageQuestion No 42 Chapter No 11 – D.K Goal 11 Class

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