Which of the following would be considered a revenue expenditure?
A)Purchase of a microcomputer
B)Installation of a heating system
C)Addition of a building wing
D)Replacement of a truck's battery

Question

Quizplus · Accepted Answer

Replacement of a truck's battery is a revenue expenditure because it is a recurring expense required to maintain the truck's operability and generate revenue for the business. There is no improvement or addition to the truck's capacity or lifespan, making it a regular operating cost. The other options, such as purchase of a microcomputer or addition of a building wing, are considered capital expenditures because they are investments in the business and have a beneficial impact over several years, whereas installation of a heating system involves refurbishment that would improve the building's worth or benefit, making it also a capital expenditure.

Which of the Following Would Be Considered a Revenue Expenditure