Which of the following is not a revenue expenditure?
Answer Details
The option that is not a revenue expenditure is "purchases of motor vehicle".
Revenue expenditures are expenses incurred in the normal course of business operations and are charged to the income statement as expenses. These expenditures are used up or consumed within the current accounting period and are not expected to provide future benefits beyond the current accounting period.
Payments of salaries and advertisement expenses are examples of revenue expenditures because they are normal operating expenses that are necessary to generate revenue for the business.
On the other hand, purchases of goods and services that are intended for resale or to be used in the production of goods for resale are also considered revenue expenditures. However, purchases of motor vehicles are not considered revenue expenditures because they are classified as capital expenditures, which involve the acquisition of long-term assets that provide future benefits to the business beyond the current accounting period.