The remainder of this chapter will focus on these tools. Some carryover of appropriations should be authorized, at least for capital expenditures, but needs to be regulated. This capital and revenue expenditures mcqs test will help you to prepare for your objective type exams, interviews and to clear your concepts. Revenue expenditures are defined as those whose benefits will be realized within a yearfor example, payment for wages, supplies and insurance. This could be implemented either by allowing the updating of. Chapter 5 capital expenditure analysis capital expenditures business expenditures can be categorized into two main types. If so, how much amounts received and used for a specific period is known to the management. Fortunately, a number of analytical tools are available to bring logical and rationale decisionmaking processes to bear on capital expenditure decisions. There are normally two forms of capital expenditures. Commitment limits may be multiyear in nature usually for capital proj.
An expected sources and uses of funds may be prepared in a statement form. Each question has 4 answers from which you need to choose the correct one. Capital and revenue expenditures multiple choice questions. Budgetary control is defined by the institute of cost and management accountants cima as.
Capital expenditure will be cut back this year and the pace of the refit programme could slow. Capital expenditure definition and meaning collins. The future recurrent costs of capital expenditures the funding. In this way, capital expenditure controlled through capital budgeting. This is because financial control was covered in detail in chapters one and two. Capital expenditures definition, overview and examples.
A cash budget fits well the need for compliance and expenditure control. This chapter focuses on the core processes of budget preparation, and on mechanisms for aggregate expenditure control and strategic allocation of resources. They can be most helpful in evaluating capital expenditure decisions. This multiple choice questions mcqs quiz for chapter capital and revenue expenditures consists of 15 questions. A capital expense can either be tangible, such as a machine, or intangible, such as a patent. Auditing capital projects and project controls chapters site. Capital expenditures, profits, and the acceleration principle. First, it examines some conceptual and technical problems in the estimation of capital expenditures and capital stocks by industry.
Expenditure control, budget execution, treasury management. Weve talked before about the definition of an expense in accounting, but there are more specific categories of expenditures that, as a small business owner, you should be familiar with. Expenditures, profits, and acceleration principle capital expenditures have been periods of high profits and periods of low capital expenditures have been periods of low profits. Cuts in the noncore program during budget execution would tend to increase inefficiency, and reduce further the meager operations and maintenance budget in most developing countries. Second, it presents capital expenditures estimates for thirty major industry sectors. Opportunities and challenges, chapter 11, pfm and its. Currently, in new zealand, transfers and capital contributions to increase in. A good manager is well advised to understand and utilize these tools. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext.
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