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    Question

    Which of the following involves an expenditure that is

    initially recognized as an expense but is expected to provide benefits in future accounting periods?
    A Deferred revenue expenditure Correct Answer Incorrect Answer
    B Revenue receipt Correct Answer Incorrect Answer
    C Capital expenditure Correct Answer Incorrect Answer
    D Revenue expenditure Correct Answer Incorrect Answer

    Solution

    Deferred revenue expenditure is initially recognized as an expense but is amortized over future periods because it provides benefits over the long term. This treatment ensures that the cost is spread across the periods it benefits.

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