Revenue deficit is that which occurs when the government’s total revenue expenditure exceeds its total revenue receipts.
When total expenditure is more than total revenue in budget is called?
The excess of total expenditure over total receipts excluding borrowings is called Fiscal Deficit . In other words, the Fiscal Deficit gives the amount needed by the government to meet its expenses.
What is excess of expenditure over revenue?
Revenue deficit in excess of total revenue expenditure of the government over its total revenue receipts. 2. It is related to only revenue expenditure and revenue receipts of the government. 3. Alternatively, the shortfall of total revenue receipts compared to total revenue expenditure is defined as revenue deficit.
When the government’s revenue exceeds government expenditure it is known as budget?
Explanation: Surplus budget refers to the excess of government revenue over the expenditure. In other words, when the government revenue is greater than its expenditure, it is called a surplus budget.
Is revenue a expenditure?
Revenue expenditures are short-term expenses used in the current period or typically within one year . Revenue expenditures include the expenses required to meet the ongoing operational costs of running a business, and thus are essentially the same as operating expenses (OPEX).
Why is repayment of loan a capital expenditure?
(B) Repayment of loan is also capital expenditure because it reduces liability . These expenditures are met out of capital receipts of the government including capital transfers from rest of the world. 1. ... It is incurred for acquisition of capital assets.
What is difference between profit and loss account and income and expenditure account?
Income and expenditure account is account which is prepared for finding the excess of income over expenditures or excess of expenditures over incomes. Profit and loss account is the account which is prepared for finding net profit or net loss .
What does income and expenditure reveal?
An income and expenditure account is an account revealing the surplus or deficit of a non-trading concern , which involves matching incomes and expenses over a specified accounting period.
What counts as a capital expenditure?
Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment . ... Making capital expenditures on fixed assets can include repairing a roof, purchasing a piece of equipment, or building a new factory.
What are the types of government expenditure?
So government spending or government expenditure is often divided into three main types : Current Expenditures or Government final consumption expenditure on goods and services for current use to directly satisfy individual or collective needs of the members of the community. Capital Expenditure or Gross.
What are the 3 types of budgets?
A government budget is a financial document comprising revenue and expenses over a year. Depending on these estimates, budgets are classified into three categories- balanced budget, surplus budget and deficit budget .
What is called a balanced budget?
A balanced budget is a situation in financial planning or the budgeting process where total expected revenues are equal to total planned spending . This term is most frequently applied to public sector (government) budgeting.
Is salary a capital expenditure?
Wages, salary, utility bills printing and stationery, inventory, postage, insurance, taxes and maintenance cost, among others. Hence, both capital expenditure and revenue expenditure are vital for the sustainable profitability of a business venture.
How many types of revenue expenditure are there?
Revenue expenditure types
Revenue expenditure can be divided into two categories ; direct expenses and indirect expenses.
What are the types of revenue expenditure?
Different types of revenue expenditure
Revenue expenditures typically fall into two categories: Expenses for maintaining revenue-generating assets – Such as repair and maintenance of equipment or any other costs to support current operations.
Is loan A expenditure?
Is loan repayment an expense? A loan repayment comprises an interest component and the principal component. For accounting purposes, the interest portion is considered as an expense, and the principal portion is reduced from the liability and tagged under headings such as Loan Payable or Notes Payable.
