Question

41. A revenue expenditure A) B) Increases the book value of a long-term asset Decreases the book value of a long-term asset Increases a revenue account Increases an expense account D) 42. Which of the following is a capital expenditure'? A) B) Cost to add air conditioning to a company car Cost to purchase garbage cans for the company conference room Cost to replace spark plug on company lawnmower D) Cost to have store windows washed 43. Which of the following is a revenue expenditure? A) B) C) D) Adding air conditioning to a company car Adding a loading and unloading dock to the company's warehouse Purchasing a microcomputer for the marketing department Replacing the battery in a company truclk

Answer 1

41

A revenue expenditure increases an expense account.

Option D is correct

42

Cost to add air conditioning to a company car is a Capital expenditure, as it is expected to benefit more than one accounting period

Option A is correct

43

Replacing the battery in a Computer truck is a revenue expenditure, as it is normal replacement cost.

Option D is correct

44

Average total assets = (1800000+2200000)/2 = $2000000

Return on assets = Net income/Average total assets = 110000/2000000= 5.5%

Option A is correct