Iii deffered revenue expenditure deferred revenue

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(iii) Deffered Revenue Expenditure : Deferred Revenue Expenditure is revenue expenditure in nature but is written off (charged) in more than one accounting period. For example, large advertising expenditure that will give benefit for more than one accouting period is a Deferred Revenue Expenditure. Q.9. What is Expense ? Ans. Expense is the cost incurred for generating revenue. It is the value which has expired during the accounting period. It may be (i) Cash payment such as salaries, wages, rent, etc (depreciation). (ii) An amount written off out of a current assets (say bad debts). (iii) Decline in the value of assets (say investment) (iv) Cost of good sold. An expense is charged (debited) to Profit and Loss Account. Prepaid Expenses : It is an expense that has been paid in advance and the benefit of which will be available in the following year or years. Outstanding Expenses : It is an expense that has been incurred but has not been paid. Q.10. What is Income or Profit ?
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14 Address: Plot No 420, Behind Shopprix Mall, Vaishali Sector 5, Ghaziabad 201010 M: 9999907099, 9818932244 O: 0120-4130999 Website: , Ans. Income is the profit earned during a period. In other words, the difference between revenue and expenses is termed as Income. Income = Revenue expenses Income is also known as Profit Q.11. Define Gross Profit/ Net Profit. Ans. Profit is normally categorized into gross profit and net profit. Gross Profit : Gross Profit is the difference between revenue from sales and/ or services rendered over its direct cost. Net Profit : Net profit is the profit earned after allowing for all expenses. In case expenses are more than the revenue, it is Net Loss. Q.12. What is gain ? Ans. Gain is a profit of irregular or non-recurrent nature. It is a profit that arises from transactions which are incidental to business such as profit on sale of fixed asset or investments. Q.13. What is loss ? Ans. Loss is excess of expenses of a period over its related revenues which may arise from normal business activities. It decreases the owner’s equity. Q.14. Define the term Purchases. Ans. The term ‘Purchases’ is asso ciated with or used for purchases of goods. Goods are articles purchased for resale or for producing the finished products which are also to be sold. Q.15. Define purchases return. Ans. Goods purchased may be returned to the seller for any reason, say, they are not as per the specifications or are defective. Goods returned are known as Purchases Return or Return Outward. Q.16. Define the term sales. Ans. The term ‘Sales’ is associated with or used for sale of goods that are dealt with by the firm. The term ‘sales’ includes both cash and credit sales. When goods are sold for cash, they are termed as Cash Sales and when sold on credit, they are termed as Credit Sales.
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15 Address: Plot No 420, Behind Shopprix Mall, Vaishali Sector 5, Ghaziabad 201010 M: 9999907099, 9818932244 O: 0120-4130999 Website: , Q.17. Define sales return.
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