Question : Which of the following statements are true?
Statement 1- Payment of salaries, health services are the part of capital expenditure.
Statement 2- Revenue expenditure do not create any asset.
Option 1: Both are true .
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 2 is true and statement 1 is false.
Correct Answer: Statement 2 is true and statement 1 is false.
Solution : Payment of salaries, health services are the part of revenue expenditure. It does not lead to any change in assets or liabilities. Revenue expenditure do not create any asset or reduces any liability. Hence option D is correct.
Statement-1 An expenditure is revenue expenditure, if it either creates an asset or reduces a liability.
Statement-2 An expenditure is a capital expenditure, if it neither creates an asset nor reduces any
Statement 1- Capital expenditure neither reduces a liability nor creates an asset.
Statement 2- Flyovers, purchase of machines are the part of capital expenditure.
Statement 1- Small savings are treated as revenue receipts.
Statement 2- Disinvestment is a part of the revenue expenditure
Question : Which of the following statement are true?
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