State the nature of the following transactions.
i) Expenditure incurred on issue of equity shares.
ii) Cost of formation of anew company.
iii) Cost of Rs.10,000 incurred in increasing the sitting accommodation and Rs.5,000 in repainting of cinema house.

State the nature of the following transactions:
i) Carriage paid on goods purchased.
ii) Legal expenses incurred for abuse of trade mark.
iii) Money raised by issue of equity shares.

Mr. Vasudevan gives you the following transactions in his business, classify into capital or revenue.
i) Purchases of goods worth Rs.7,000 for the purpose of Selling.
ii) Rs.1,200 fire insurance for the building for business.
iii) Renewal of magazine subscription fee Rs.125.
iv) Purchased land for Rs.1,00,000.

Explain the features of capital expenditure.

What is Revenue profit?

What is revenue receipts? Give any two examples.

Any two examples of deferred revenue expenditure.

Classify the following expenditures and receipts as capital or revenue:
i) Rs.10,000 spent as travelling expenses of the directors on trips abroad for the purchase of fixed assets.
ii) Amount received from trade receivables during the year.
iii) Amount spent on demolition of building to construct a large building on the same site.
iv) Insurance claim received on account of a machinery damaged by fire.

State whether the following are capital or revenue items.
i. Rs.5,000 spent towards additions to buildings.
ii. Second-hand motor car purchased for Rs.30,000 and paid Rs.2,000 as repairs immediately.
iii. Rs.10,000 was spent on painting the new factory.
iv. Freight and cartage on the new machine Rs.150, erection charges Rs.200.
v. Rs.150 spent on repairs before using a second hand car purchased recently.

State with reasons whether the following are capital or revenue or deferred revenue expenditure:
i) Advertisement expenses amounted to Rs.10 crores to introduce a new product.
ii) Expenses on freight for purchasing new machinery.
iii) Freight and insurance on the new machinery and cartage paid to bring the new machinery to the factory.