Capital And Revenue Expenditure

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Correct options are highlighted when revealed.

1.If the directors do not appoint the first auditor(s), at which meeting must the shareholders appoint them by passing a resolution?

a general meetingthe initial annual general meetingthe statutory meetingthe annual general meeting

2.When must the board of directors appoint the first auditor of a company?

Within one month after the company completes its capital subscriptionWithin one month following the company's promotionWithin one month after the company begins its business operationsWithin one month from the date the company is incorporated

3.Which of the following costs should be classified as a revenue expense rather than a capital expenditure?

Costs incurred for installing a new plant.Expenses involved in demolishing a building to make way for new construction.Legal fees paid to protect the ownership rights of a patent.Payments made to the engineer responsible for building the plant.

5.Identify which of the following qualifies as a revenue reserve.

Reserve for capital redemptionAccount for security premiumReserve for debenture redemptionCapital reserve fund

6.Which of the following actions does not result in the formation of a secret reserve?

Reporting closing inventory at a value lower than its actual worthRecording capital expenses as operating costsTreating consignment shipments as genuine sales in the accountsApplying depreciation rates on fixed assets that exceed the necessary amount

7.Which of the following is NOT a cause of depreciation?

passage of timewear and tear from usagebecoming outdated due to technological or market shiftschanges in market expectations

8.Which of the following should not be classified as a revenue expenditure?

Expenses related to obtaining a loanCost of motor vehicle accessories purchased alongside the vehicleCosts for installing sewer systems on newly acquired landInsurance fees paid during the registration of a ship