Distinguishing Revenue Expenditure from Capital Receipts

Steps:

• Define revenue expenditure as recurring costs for maintenance or operations, benefiting the current period.
• Define capital receipt as non-operating inflow, such as loans or asset sales proceeds, not from core business.
• Examine each option to find one item matching revenue expenditure and one matching capital receipt.
• Confirm the pair in option D fits both definitions precisely.

Why D is correct:

• Repairs to motor vehicles qualify as revenue expenditure under accounting standards (e.g., IAS 16), as they maintain asset condition without extending useful life; receipt of a loan is a capital receipt, representing long-term financing not from operations.

Why the others are wrong:

• A: Carriage inward on non-current asset is capital expenditure (added to asset cost); issue of debentures is capital receipt.
• B: Commission received is revenue receipt (operating income); proceeds from non-current asset sale is capital receipt.
• C: Discounts allowed is revenue expenditure; cash drawings is owner's capital reduction, neither a receipt nor standard expenditure.

Final answer: D