The following Capital and Revenue expenditure worksheet-1 covers all the aspects of Capital and Revenue Expenditure and Receipts. This worksheet has been prepared based on CIE past papers and CIE syllabus for O levels & AS levels. Hence, independent practice of these worksheets (Worksheet-1 and Worksheet-2) boost the pupil's confidence and morale. As answers are not provided for these worksheet questions, you may use the comments section below or forum on this website to discuss difficult aspects of this worksheet. We love to help you if you have any difficulty in practicing this worksheet. Educators may download these worksheets (Printable PDF form) from resources section of this website for classroom use.
Note: There are 9 questions (A to I) in this Capital and Revenue Expenditure Worksheet.
A. Explain the difference between capital and revenue expenditure.
B. Explain the difference between capital and revenue receipts.
C. Define the term ‘revenue receipt’.
D. Explain each of the following accounting terms.
(i) Revenue expenditure
(ii) Capital receipt
(iii) Revenue Receipt
(iv) Capital expenditure
E. Classify whether each transaction is a revenue expenditure, a revenue receipt, a capital expenditure or a capital receipt.
F. During the year ended 31st December 2017, Exotic Fresh LLP carried out work on it’s property. Indicate which of the following is capital expenditure or revenue expenditure.
G. The following balances are included in Tim’s books of accounts:
|Purchases of inventory||54,000|
|Cash discount allowed||1,600|
|Purchases of delivery van||21,900|
|Annual maintenance of delivery van||1,200|
|Power and electricity||1,300|
|Revenue from sale of inventory||98,000|
|Delivery of van from manufacturer||1,000|
|Diesel for delivery van||500|
|Loan against mortagage||18,000|
|Sign writing Tim's business name on the delivery van||600|
|Sale of old equipment||2,000|
|Delivery van insurance||500|
|Replacement of tyres for delivery van||800|
REQUIRED: Identify the revenue income, revenue expenditure, capital expenditure and capital income from the above balances.
H. Indicate which of the following is capital receipt or revenue receipt.
I. The following financial statements, which contain errors, were prepared by an inexperienced book-keeper.
Income Statement for the year ended 31 December 2017.
|Income from sale of non-current assets||10,000|
|Cost of goods sold||(55,000)|
|Purchase of non-current assets||20,000||(30,000)|
|Profit for the year||15,000|
Statement of financial position as at 31 December 2017.
|Rent and Rates paid||4,000|
|Profit for the year||15,000|
End of Capital and Revenue Expenditure worksheet (1).
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