Multiple choice

Which of the following is a revenue expenditure?

  1. Repairs on the purchase of second hand asset to put it into working condition

  2. Preliminary expenses

  3. Cost of issuing shares and debentures

  4. Legal expenses to defend a suit file by the competitor
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Revenue expenditures are costs incurred for the day-to-day running of a business. Legal expenses to defend a suit filed by a competitor are considered revenue expenditures because they are operational costs aimed at maintaining existing business rights.

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