Multiple choice

The furniture purchased by a dealer dealing in furniture for resale purpose is

  1. revenue expense

  2. capital expense

  3. deferred revenue expense

  4. none of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Anything purchased for resale purpose is revenue expense. Capital expenditures are made on assets. The deferred revenue expenses are paid during the current period but not written off due to the heavy expenditures; and the benefit is likely to be secured in more than one period such as advertisement, suspense.

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