Revenue Expenditure (25 September 2009)
Revenue expenditure is recorded as expenses in Income Statement. Examples of revenue expenditure are office rentals, utilities such as water & electricity, printing & stationery & etc.. Revenue expenditure also includes those incurred to maintain the earning capacity of non-current assets such as repairs and maintenance. It is the expenditure on goods or services which will be used up i.e. the benefits that come with the goods or services will be consumed. The unused goods purchased would then be recognised as inventory on Balance Sheet i.e. part of Current Assets.
Example – On 31/1/2007, Dragon Co. Ltd. issue a cheque of $88.98 to pay its electricity bill and another cheque of $1,500 to pay its monthly rental of shop. The double entry to record these transactions is: –