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What do you mean by Revenue Expenditure?

According to William Pickles “Revenue expenditure can be described as such outlay as is necessary for maintenance of earning capacity, including the upkeep of fixed assets in a fully efficient state, and the normal total cost involved in selling, including the cost of goods and services of the business to which it relates.”

Wealth Creation (part 1) | J.B. Farrell

image source: joshuabfarrell.com/wp-content/uploads/2013/02/Income-graphic.jpg

Revenue expenses may be classified as:

  • It includes price for purchases, carriage, freight, duties and clearing charges etc. On purchases, incurred upto getting the goods to the custody of the business.
  • These include cost of raw materials consumed, wages, power, lighting and heating etc.
  • These include expenses incurred  on fixed assets for repairs or servicing etc.
  • They include salaries, printing, stationery, telephone, postage, legal expenses etc.
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