A company has spent Rs. 20,000 on painting of its building. It should be recorded as

The correct answer is Revenue expenditure.

Key PointsRevenue expenditure: This type of expenditure is incurred in the current period and is matched against the revenue generated in the same period. It is a normal expense that is incurred in the course of business and is expected to be repeated in future periods.

Important Points

•  As per the Accounting Standard (AS) 26 issued by the Institute of Chartered Accountants of India (ICAI), the concept of deferred revenue expenditure has been eliminated.
• The AS 26 is applicable to all enterprises from 1st April 2004.
• Under this standard, certain expenses that were previously considered as deferred revenue expenditure are now recognized as expenses in the accounting period in which they are incurred.

Hence, 

• Based on the given information, the expenditure of Rs. 20,000 on painting the building should be recorded as a revenue expenditure.
• Revenue expenditures are those expenses that are incurred in the day-to-day operations of a business and are charged to the income statement in the period they occur.
• The painting expense is not expected to provide any future economic benefits or increase the value of the building, which aligns with the treatment as a revenue expenditure.

A company has spent Rs. 20,000 on painting of its building, it is a Revenue expenditure. 

Note: 

• Painting of a new building before using it is considered as capital Expenditure.