- Liabilities Accounting
- Liabilities Examples
- Types of Liabilities on Balance Sheet
- Contingent Liabilities
- Contingent Liabilities Example
- Accounts Payable | Days Payable Outstanding | Formula |
- Accounts Payable Examples
- Accounts Payable Credit or Debit
- Accounts Payable Cycle
- Salary Payable
- Current Liabilities | List of Current Liabilities on Balance Sheet
- Current Liabilities Formula
- List of Current Liabilities
- Current Liabilities Examples
- Non Current Liabilities Examples
- List of Non-Current Liabilities Examples
- Accrued Liabilities
- Accrued Expenses vs Accounts Payable
- Accrued Expenses
- Accrued Interest Formula
- Accrued Interest
- Notes Payable
- Accounts Payable vs Notes Payable
- Revolving Credit Facilities
- Bonds Payable Accounting
- Amortization of Bond Premium
- Bad Debt Provision
- Bad Debt Reserve Allowance
- Deferred Expenses
- Deferred Tax Liabilities
- Unearned Revenue (Sales)
- Is Unearned Revenue a Liability?
- Deferred Revenue (Income)
- Revenue Expenditure
- Revenue Expenditure Examples
- Current Portion of Long-Term Debt (CPLTD) | Balance Sheet
- Short Term Loans
- Long-Term Debt in Balance Sheet
- Long-Term Liabilities Examples
- Book Value of Debt
- Leveraged Loans
- Financial Liabilities | Definition, Types, Ratios, Examples
- Financing Activities
- Long-Term Liabilities
- Liability vs Debt
- Accounts Receivable vs Accounts Payable
- Minority Interest
- Accounting for Convertibles
- Accounting for Derivatives
- Operating Lease
- Operating Lease Accounting
- Capital Lease
- Capital Lease Accounting
- Finance Lease
- Hire Purchase
- Equipment Lease
- Lessor vs Lessee
- Capital Lease Criteria
- Loan vs Lease
- Financial Lease vs Operating Lease
- Off balance Sheet Financing
- Finance vs Lease
- Bond vs Loan
- Triple Net Lease
- Credit Terms
- Debtor vs Creditor
- Accounting Basics (80+)
- Bookkeeping (52+)
- Balance Sheet (30+)
- Assets (109+)
- Shareholders Equity (91+)
- Income Statement (158+)
- Cash Flow Statement (17+)
- Accounting Careers (26+)
- Accounting Books (8+)
- Budgeting in Finance (31+)
Revenue expenditure is the expenditure incurred by the company during its normal course of business operations for which the benefit will also be received in the same accounting period in which it is incurred and is shown as the expense in the income statement of the company.
What is Revenue Expenditure?
Revenue expenditure is the sum of the expense that the business incurs in the production of goods and services which helps for revenue generation of the company in an accounting period.
- It is of primarily two types – one is related to the cost of sales and other is related to operating expense. Cost of sale is the expense done on acquiring of goods or service which need to sale in the market and operating expense is an expense which needs to be done to run business and its operations properly.
- These expense to be recorded in the same time period when revenue is generated on produced of goods or service (matching principle)
Explanation of Revenue Expenditure
Let us take a revenue expenditure example of a printing press. The amount spent each year to print brochures, cards, book, etc will be categorized as revenue expenditure. In addition, any cost of repair of the printing machines will also account as revenue expenditure. However, any amount spent to upgrade the printing press (so that it can print more pages, better quality, etc or increase its useful life) will be classified as capital expenditure.
4.9 (1,067 ratings)
Revenue Expenditure Examples
There are multiple examples of revenue expenditures some of them are as follows:-
- Service charges to machinery, vehicles, etc.
- Petrol, diesel consumption.
- Bad Debt Expense
- Repair cost of machinery, vehicles, etc.
- Maintenance cost of machinery, vehicles, etc.
- Painting on machinery to avoid corrosion.
- Oil for lubrication of machinery.
- Power or electricity required for the functioning of machinery.
- Wages paid to labors.
- Insurance premium paid on machinery, vehicles, etc.
Types of Revenue Expenditure
Revenue expenditures are of two types they are as follows:-
- Direct Expense
- Indirect Expense
#1- Direct Expense
The direct expense is expense occur from the production of raw material to final goods and service. The direct expense example is wages of labor, shipping cost, power, and electricity bill cost, rent, commission, legal expense, etc.
#2- Indirect Expense
The indirect expense is expense occur indirectly they are generated in connection with the selling of goods and service and its distribution. Indirect expense examples are machinery, depreciation, wages, etc.
Revenue expenditure is incurred for the following purpose –
- It incurred in the normal course of business like expense incurred in the selling of product and in manufacturing, administrative expense etc.
- This is reflected in trading and profit and loss account.
- For maintaining fixed assets in working order. For example repair of machinery, depreciation etc.
- Expenditure on goods purchased for resale.
- The expense for the proper functioning of the business.
This has been a guide to Revenue Expenditure its definition and its meaning. Here we discuss revenue expenditure types (direct/indirect) along with practical examples. You can learn more about accounting with the following articles –