What Are Revenue Expenditures - Definition - Meaning - Example

Previously, we studied about Capital Expenditures. Here, we will take into account Revenue Expenditures in some detail. Those expenditures which are incurred in day to day conducting of business operations. Usually, the benefits arise from these types of expenditures are exhausted within one Accounting period not more than one year. Examples are Wages paid to factory workers for the purchasing of goods supplies, Repairs And Maintenance of Fixed Assets like Machinery, Motor Vehicles, etc. Revenue Expenditures are categorized as Expenses or Expired Cost because the benefit is received by the business within one accounting period. Examples are Rent Paid, Salaries Paid, Travelling And Transportation Expenses, Freight, Carriage, Cost of Sales or Cost of Goods Sold, Depreciation Expense, Bad Debts Expense, etc. These are also known as Recurrent Expenditures.

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A Ledger or T Account is prepared for recording Transactions related to Revenue Expenditures. When these expenditures incurred we debit these one but we credit it when we close these one by transferring to Income & Summary Statement. Revenue Expenditures are recorded in Income Statement / Profit And Loss Account as an Expense for the period.