Question: What Do You Mean By Plan Expenditure?

What is Plan capital expenditure?

A plan for a company’s capital expenditures.

They are used to acquire assets or improve the useful life of existing assets; an example of a capital expenditure is the funding to construct a factory.

Making a capital budget must account for the potential profitability of the plans involved..

What is revenue expenditure?

Revenue Expenditure is that part of government expenditure that does not result in the creation of assets. Payment of salaries, wages, pensions, subsidies and interest fall in this category as revenue expenditure examples. Also, note that revenue expenses are incurred by the government for its operational needs.

What is primary deficit?

Primary Deficit indicates the borrowing requirements of the government, excluding interest. It is the amount by which the total expenditure of a government exceeds the total income. Note that primary deficit does not include the interest payments made.

What are the types of capital expenditure?

Understanding Capital Expenditures (CAPEX)CAPEX and Depreciation. Depreciation is used to expense the fixed asset over its useful life. … Capital Expenditures Limits. … Buildings and Property. … Upgrades to Equipment. … Software Upgrades. … Computer Equipment. … Vehicles. … Intangible Assets.

What is an example of expenditure?

Expenditure definitions The definition of an expenditure is the act of spending money or time and it is something on which you spend money. An example of an expenditure is the money spent on office equipment that you have purchased. … The amount of money, time, etc. expended; expense.

What are the 2 types of expenditure?

Types of Expenditures in AccountingCapital Expenditure. A company incurs a capital expenditure. (CapEx) when it purchases an asset with a useful life of more than 1 year (a non-current asset). … Revenue Expenditure. A revenue expenditure occurs when a company spends money on a short-term benefit (i.e., less than 1 year).

What are the 4 types of expenses?

You might think expenses are expenses. If the money’s going out, it’s an expense. But here at Fiscal Fitness, we like to think of your expenses in four distinct ways: fixed, recurring, non-recurring, and whammies (the worst kind of expense, by far). What are these different types of expenses and why do they matter?

What are plan and non plan expenditures?

Non-plan expenditure is what the government spends on the so-called non-productive areas, such as salaries, subsidies, loans and interest, while plan expenditure pertains to the money to be set aside for productive purposes, like various projects of ministries.

What is called expenditure?

An expenditure is money spent on something. Expenditure is often used when people are talking about budgets. It is the government’s job to decide what to do with tax money collected, or in other words, to determine the expenditure of public funds. The word is more than a long way of saying expense.

Why is payment of interest a revenue expenditure?

Why is payment of interest a revenue expenditure? Because it neither creates assets nor reduces government’s liability.

What are the three types of expenditure?

The 3 types of expenses include: fixed, variable and periodic. Fixed expenses occur in predictable amounts and are usually paid in monthly intervals. Periodic expenses also occur in predictable amounts and intervals, but are much less frequent (i.e. quarterly).

What do you mean by public expenditure?

Public expenditure is spending made by the government of a country on collective needs and wants such as pension, provisions (such as education, healthcare and housing), security, infrastructure, etc. … Sources of government revenue include taxes, and non-tax revenues.

Which of the following expenditure is included in plan expenditure?

Items of plan expenditure are: (i) expenditure on electricity generation, (ii) irrigation and rural developments, (iii) construction of roads, bridges, canals and (iv) science, technology, environment, etc. It includes both revenue expenditure and capital expenditure.

Is Rent a capital expenditure?

Capital expenses are not used for ordinary day-to-day operating expenses of a business, like rent, utilities, and insurance. … On the other hand, if you buy office furniture, it is expected that it will last longer than a year, so you are buying a fixed asset, and that purchase is considered a capital expense.

What are the objectives of budgeting?

Providing action plan, estimation of income and expenditure, guiding the management in forecasting and decision making etc. are some notable objectives of budget. A budget provides a realistic estimate of income and expenses for a period and of the financial position at the close of the period.

Why are subsidies treated as revenue expenditure?

Subsidies are treated as revenue expenditure as it does not reduce the liability of the government and it does not add to assets of the government.

Why are plan and non plan expenditures abolished?

Why is Plan and Non-Plan Expenditure abolished? The main reason behind the abolishing Plan and Non-Plan expenditure by the Government of India was the C Rangarajan Committee report of 2011. The new classification will assist the Government to create a proper link between Government spendings, earnings, and outcomes.

What do you mean by non plan expenditure?

Definition: This is largely the revenue expenditure of the government, although it also includes capital expenditure. It covers all expenditure not included in the Plan Expenditure. For defence services, both revenue and capital expenditure are incurred. …

What is capital expenditure and revenue expenditure?

Capital expenditures are typically one-time large purchases of fixed assets that will be used for revenue generation over a longer period. Revenue expenditures are the ongoing operating expenses, which are short-term expenses used to run the daily business operations.

What are the capital receipts?

Capital receipts are receipts that create liabilities or reduce financial assets. They also refer to incoming cash flows. Capital receipts can be both non-debt and debt receipts. Loans from the general public, foreign governments and the Reserve Bank of India (RBI) form a crucial part of capital receipts.

Does non plan expenditure contribute to social welfare justify your answer?

Yes, non-plan expenditure does contribute to the social welfare. Most of the non- planned expenditure consists of expenditure on subsidies and the maintenance of law and order in the country. Both these categories of expenditure are welfare-oriented.