Multiple choice

The distinction between Capital and Revenue is essential for preparing

  1. cash flow statement

  2. final account

  3. receipts and payment account

  4. profit and loss account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The distinction between capital and revenue expenditure/income is fundamental for preparing final accounts. Capital items affect the balance sheet and provide benefits over multiple years, while revenue items affect only the current period's profit and loss statement.

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