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Payment of Honorarium to secretary is treated as
Capital Expenditure
Revenue Expenditure
Cash Expenses
None of these
- Option 1: Capital Expenditure - These are costs incurred to acquire or improve long-term assets like buildings, machinery, or equipment. Payment of honorarium does not lead to any acquisition or value addition to long-term assets.
- Option 2: Revenue Expenditure - These are expenses incurred for the day-to-day running of a business, such as salaries, rent, or utilities. Payment of honorarium to a secretary fits here as it’s part of the routine operating costs.
- Option 3: Cash Expenses - This option indicates any expense paid in cash. While honorarium can be a cash expense, this classification doesn’t define its nature in financial reporting terms.
- Option 4: None of these - This would only apply if the honorarium did not fit any of the given categories.
- Correct Answer: Option 2 - Revenue Expenditure
By: Subhash Singh ProfileResourcesReport error
temura nikitha
Why it is not capital expenditure
Because we are paying for their service provided during the current financial year. Its like a salary paid but since these people are not employed by the NPO so they get an amount as a kind of reward for their social service
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