INTERVIEW QUESTIONS ACCOUNTS FIXED ASSETS DETAILS

Question: Define what is meant by the terms "capital" and "revenue" items in connection with fixed assets.

Answer: The amount invested to purchase an fixed asset and the benfits of the asset is used for more than 1 year then the amount spent is said to be of capital nature. The amount spent on repair and maintenace of fixed asset and the benefit for the expenditure for for less than 1 year then the amount spent is said to be of revenue in nature.

The amount invested to purchase an fixed asset and the benfits of the asset is used for more than 1 year then the amount spent is said to be of capital nature. The amount spent on repair and maintenace of fixed asset and the benefit for the expenditure for for less than 1 year then the amount spent is said to be of revenue in nature. Source: CoolInterview.com

Assets which will able to serve the organization minimum an accounting cycle and which is material item in terms of value are capital assets.Less than one year and immaterial item are revenue assets. Source: CoolInterview.com

the difference between revenue&
capital assets linked to fixed assets are revenue exp are business exp but where as capital
exp is related to assets Source: CoolInterview.com

any expenses made on purchase of any assest more than one yaer it should be capital nature and less than one year its nature of revenue but any repair and change in any parts who increase the capisty of assets its should be capitalised as per AS-10( fixed assets) Source: CoolInterview.com

Capital item:
1.Amount of Historical cost capitalised.
2.Major Repair and Maintanence enhancing the life of the asset.

Revenue item:

1.Depreciation on Fixed assets
2.Overhauling expenses
3.Repairs not enhancing life of the asset. Source: CoolInterview.com

any amount invested or purchase for any assets that asset must be used for more than one financial year then that will be capital revenue if that asset will used less then one financial year then that will be revenue expenditure that expenditure will be debited in profit and loss account in that financial year only. Source: CoolInterview.com

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