Income and revenue are not the same. Income of any form is called revenue, whereas revenue is any income or expenditure. Revenue expenditures are the amounts spent on routine business expenses, such as salaries paid to employees or rent. Given that revenue expenditures offer benefits to businesses for the current accounting period, they are debited as expenses in the trading and profit and loss account. At the end of the year, some revenue items may still be on hand, including stock and stationery. These items are transferred to the next year. Revenue expenditures have the following features: Any expenditure can be referred to as an item of revenue expenditure if it is incurred for one of the following purposes: Routine expenditures incurred during the daily conduct of business with a benefit of less than one year. Salaries paid to employees, office rent, interest on capital, and sales and marketing expenses. Expenditures incurred to maintain fixed assets. Repairs, renewals, and depreciation. Expenditures incurred on consumable items or goods and services for resale in their original or improved shape. Purchase of raw materials, office stationery, etc. To clarify revenue expenditures further, a list is given below that includes more examples:Revenue Expenditures
Features of Revenue Expenditures
Rules for Determining Revenue Expenditures
1. Routine Expenses
Examples
2. Maintenance of Fixed Assets
Examples
3. Consumable Items
Examples
More Examples
Rules for Determining Revenue Expenditures FAQs
Revenue expenditures are the amounts spent on routine business expenses, such as salaries paid to employees or rent.
Revenue expenditures have the following features: - recurring nature - arise from trading activities - the amount spent on revenue expenditures is relatively small - the period of benefit from revenue expenditure is limited to an accounting period
Examples of routine business expenses include salaries paid to employees, rent and rates for factory or office premises, inventory of raw materials, work-in-progress, finished goods, etc. Consumable stores are also examples of routine business expenses.
Any expenditure can be referred to as an item of revenue expenditure if it is incurred for one of the following purposes: - Routine Expenses - Maintenance of Fixed Assets - Consumable Items
Routine expenditures are those incurred during the daily conduct of business with a benefit of less than one year.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
