DK Goel Solutions Class 11 Accountancy Chapter 20 Capital and Revenue

Read DK Goel Class 11 Accountancy Solutions for Chapter 20 Capital and Revenue below. These DK Goel Accountancy Class 11 solutions have been prepared based on the latest book for DK Goel Class 11 for the current academic year by expert accounts teachers at studiestoday.com. These DK Goel Class 11 Solutions help commerce students in class 11 understand accountancy and build a strong base in accounts. Students in Class 11 who study accountancy and use the DK Goel Accountancy book to understand concepts of Chapter 20 Capital and Revenue should understand the concepts and solve practice questions and exercises given at the end of the chapter. We have provided solutions for all questions and have also provided short notes for each problem. This will help Class 11 DK Goel Accountancy students to understand the questions properly. Refer to the solutions provided below prepared by CBSE NCERT teachers

Chapter 20 Capital and Revenue DK Goel Class 11 Solutions

Class 11 Accountancy students should read the following DK Goel Solutions for Class 11 Chapter 20 Capital and Revenue in Standard 11. All solutions provided below can be downloaded in Pdf and are available for free. This DK Goel Book for Grade 11 Accountancy will be very useful for exams and help you to score good marks in Class 11 accountancy examinations. On our website www.studiestoday.com, we have provided solutions for all chapters given in the DK Goel Accountancy Book for Class 11.

DK Goel Solutions Chapter 20 Capital and Revenue Class 11 Accountancy

Very Short Answer Questions

Question 1. 

Solution  1: Any expenditure which is incurred in acquiring or increasing the value of a fixed asset is treated as capital expenditure.

 

Question 2. 

Solution  2: Below are the examples of capital expenditure:-

1.) Purchases of Land and Building

2.) Purchases of Plant and Machinery

 

Question 3. 

Solution  3:  Any expenditure the benefit of which is received during the current year itself is termed a as revenue expenditure. For example:- Expenses incurred for the purpose of day to day running of business such as manufacturing expenses, office expenses, selling expenses etc.

 

Question 4. 

Solution  4:

DK Goel Solutions Class 11 Accountancy Capital and Revenue

 

Question 5. 

Solution  5:

DK Goel Solutions Class 11 Accountancy Capital and Revenue-

 

Question 6. 

Solution  6: Wages paid on installation of a machine is a capital expenditure because it will be treated as a cost of machine.

 

Long Answer Questions

 

Question 1. 

Solution  1: Any expenditure which is incurred in acquiring or increasing the value of a fixed asset is treated as capital expenditure. For example:- Purchases of Land and Building, Purchases of Plant and Machinery. Whereas Any expenditure the benefit of which is received during the current year itself is termed a as revenue expenditure. For example:- Expenses incurred for the purpose of day to day running of business such as manufacturing expenses, office expenses, selling expenses etc.

 

Question 2. 

Solution  2: Any expenditure which is incurred in acquiring or increasing the value of a fixed asset is treated as capital expenditure. As such, the amount spent on the purchases of land and building, plant and machinery, furniture hence is written in assets.

Examples are:-

1.) Expenditure which results in the acquisition of a fixed asset such as land, building, plant, motor vehicles, trademarks etc. Such asset would be used in the business for a number of years.

2.) Expenditure in connection with the purchase or erection of a fixed asset such as wages paid to workers for erecting machines, cartages paid on acquiring plant and machinery, over-hauling of second-hand machines etc.

Any expenditure the benefit of which is received during the current year itself is termed a as revenue expenditure. As such, all the revenue expenditures are debited to trading and profit and loss account. Such expenditure does not result in an increase in the earning of the business but only helps in maintaining the existing earning capacity.

Examples are:-

1.) Expenses incurred for the purpose of day to day running of business such as manufacturing expenses, office expenses, selling expenses etc.

2.) Expenses incurred on the ordinary repairs and maintenance of fixed assets, white-washing of building etc.

 

Question 3.

Solution 3:

DK Goel Solutions Class 11 Accountancy Capital and Revenue-1

 

Question 4. 

Solution 4:

(a) Preliminary Expenses : Deferred Revenue Expenditure

(b) Purchases of Furniture : Capital Expenditure

(c) Payment of Salary : Revenue Expenditure

(d) Expenses paid for construction of building : Capital Expenditure

 

Practical Questions

 

Question 1.

Solution 1:

(i) Capital Expenditure cost of installation is also a capital expenditure and include in machinery account. This expense will increase the earning capacity of the firm.

(ii) Capital Expenditure as the company has been painted at first time it will included in the assets. It will be treated as a capital expenditure.

(iii) Capital Expenditure all expenses related to new machine will be capital expenditure.

(iv) Capital Expenditure as repairs are done before the generator is use.

(v) Revenue Expenditure as repairs is done on regular basis.

(vi) Capital Expenditures as raising the capital will be treated as capital expenditure.

 

Question 2. 

Solution 2:

(i) Revenue expenditure Book value = Rs. 10,000 – Rs. Sale price = Rs. 2,500 = Loss on sale of furniture of Rs. 7,500. Purchase of New furniture + cartage Rs. 6,050 will be Capital expenses.

(ii) Capital expenditure purchases of property and other related expense are capital expenditure.

(iii) Capital expenditure, as new machinery is purchased.

(iv) Capital expenditure, as damages paid on accident does not result in increasing the earning capacity of the firm.

(v) Capital expenditure, as new construction is done in increasing the earning capacity of the firm.

 

Question 3.

Solution 3:

(a) Here Rs. 20,000 is capital expenditure as it will increase the output of the firm. Rs. 5,000 is revenue expenditure Repairs as it is done on regular basis.

(b) Revenue Expenditure repairs of Rs. 40,000 is done on regular basis and Rs. 1,60,000 is done on improvements which will give future benefits, therefore its capital expenditure.

(c) Revenue expenditure, Compensation and remuneration to employees are done in normal course of business.

(d) Capital expenditure, Any expenses incurred on bringing the asset into operation will be capitalized.

(e) Revenue expenditure, Compensation and remuneration to employees are done in normal course of business.

(f) Deferred revenue expenditure benefit will be derived over a number of years.

 

Question 4.

Solution 4:

(a) Revenue receipt as this transaction belongs to normal business transaction.

(b) Capital receipt as it is a capital gain which arose by selling of machinery.

(c) Revenue receipt as it is received in normal course of business over exchange of goods.

(d) Capital receipt as it will improve the financial position of the company of the company.

(e) Capital receipt as it will enhance the productivity of the company.

(f) Revenue receipt as it is received regularly from the government.

(g) Capital receipt as it is received for construction and will it will result in increasing the earning capacity of the firm.

DK Goel Solutions Class 11 Accountancy Chapter 1 Meaning and Objective of Accounting
DK Goel Solutions Class 11 Accountancy Chapter 2 Basic Accounting Terms
DK Goel Solutions Class 11 Accountancy Chapter 3 Accounting Principles
DK Goel Solutions Class 11 Accountancy Chapter 4 Process and Bases of Accounting
DK Goel Solutions Class 11 Accountancy Chapter 5 Accounting Standards and International Financial Reporting Standards
DK Goel Solutions Class 11 Accountancy Chapter 6 Accounting Equations
DK Goel Solutions Class 11 Accountancy Chapter 7 Double Entry System
DK Goel Solutions Class 11 Accountancy Chapter 8 Origin of Transactions Source Documents of Accountancy
DK Goel Solutions Class 11 Accountancy Chapter 9 Books of Original Entry Journal
DK Goel Solutions Class 11 Accountancy Chapter 10 Accounting for Goods and Service Tax
DK Goel Solutions Class 11 Accountancy Chapter 11 Books of Original Entry Cash Book
DK Goel Solutions Class 11 Accountancy Chapter 12 Books of Original Entry Special Purpose Subsidiary Books
DK Goel Solutions Class 11 Accountancy Chapter 13 Ledger
DK Goel Solutions Class 11 Accountancy Chapter 14 Trial Balance and Errors
DK Goel Solutions Class 11 Accountancy Chapter 15 Bank Reconciliation Statement
DK Goel Solutions Class 11 Accountancy Chapter 16 Depreciation
DK Goel Solutions Class 11 Accountancy Chapter 17 Provision and Reserves
DK Goel Solutions Class 11 Accountancy Chapter 18 Bills of Exchange
DK Goel Solutions Class 11 Accountancy Chapter 19 Rectification of Errors
DK Goel Solutions Class 11 Accountancy Chapter 20 Capital and Revenue
DK Goel Solutions Class 11 Accountancy Chapter 21 Financial Statement
DK Goel Solutions Class 11 Accountancy Chapter 22 Financial Statements With Adjustments
DK Goel Solutions Class 11 Accountancy Chapter 23 Accounts from Incomplete Records
DK Goel Solutions Class 11 Accountancy Chapter 24 Introduction to Computer
DK Goel Solutions Class 11 Accountancy Chapter 25 Introduction of Accounting Information System
DK Goel Solutions Class 11 Accountancy Chapter 26 Computerised Accounting System
DK Goel Solutions Class 11 Accountancy Chapter 27 Accounting Software Package Tally
TS Grewal Class 11 Solutions: Double Entry Book Keeping Financial Accounting
TS Grewal Accountancy Class 11 Solution Chapter 1 Introduction of Accounting
TS Grewal Accountancy Class 11 Solution Chapter 2 Basic Accounting Terms
TS Grewal Accountancy Class 11 Solution Chapter 3 Accounting Standards and IFRS
TS Grewal Accountancy Class 11 Solution Chapter 4 Bases of Accounting
TS Grewal Accountancy Class 11 Solution Chapter 5 Accounting Equation
TS Grewal Accountancy Class 11 Solution Chapter 6 Accounting Procedures Rules of Debit and Credit
TS Grewal Accountancy Class 11 Solution Chapter 7 Origin of Transactions Source Documents and Preparation of Voucher
TS Grewal Accountancy Class 11 Solution Chapter 8 Journal
TS Grewal Accountancy Class 11 Solution Chapter 9 Ledger
TS Grewal Accountancy Class 11 Solution Chapter 10 Special Purpose Books I Cash Book
TS Grewal Accountancy Class 11 Solution Chapter 11 Special Purpose Books II Other Book
TS Grewal Accountancy Class 11 Solution Chapter 12 Accounting of Goods and Services Tax (GST)
TS Grewal Accountancy Class 11 Solution Chapter 12 Bank Reconciliation Statement
TS Grewal Accountancy Class 11 Solution Chapter 13 Trial Balance
TS Grewal Accountancy Class 11 Solution Chapter 14 Depreciation
TS Grewal Accountancy Class 11 Solution Chapter 15 Provisions and Reserves
TS Grewal Accountancy Class 11 Solution Chapter 16 Accounting for Bills of Exchange
TS Grewal Accountancy Class 11 Solution Chapter 17 Rectification of Errors
TS Grewal Accountancy Class 11 Solution Chapter 18 Financial Statements of Sole Proprietorship
TS Grewal Accountancy Class 11 Solution Chapter 19 Adjustments in Preparation of Financial Statements
TS Grewal Accountancy Class 11 Solution Chapter 20 Accounts from Incomplete Records Single Entry System
TS Grewal Accountancy Class 11 Solution Chapter 21 Computers in Accounting
TS Grewal Accountancy Class 11 Solution Chapter 22 Accounting Software Tally