All the expenses incurred in the course of carrying on a business are called revenue expenditures. We can call them day to day expenditures or routine expenditure. These expenses include purchase and all running expenses relating to purchase and sales. All financial expenses like interest etc. are also revenue expenditures. Revenue expenditures include all the expenditures relating to the particular financial year whether paid or outstanding. These expenses are recurring type in nature. Revenue expenditures are totally different from capital expenditures because in later case it is almost one time expenditure but in former case the expenditures are incurred repeatedly. Followings are few examples of revenue expenditures:-
- Cost of purchase:- Material cost, cartage expense, duties etc.
- Expenses relating to manufacturing of the product.:- Wages, fuel and other direct expenses.
- Administration expenses:- Salaries, postage & courier expenses, telephone expenses, office rent, stationery expenses, vehicle expenses, conveyance expenses, other office expenditures etc.
- Expenses relating to sales and distribution:- Advertisement and publicity expenses, commission to the persons involved in sale of product etc.
- Financial expenses:- Interest to bank or other financial institutions etc.
- Depreciation on fixed assets.
- Expenses relating to expiry of products and other unusual expenditures.