An expenses is said to be revenue in nature if it
-
A.
adds or contributes to the operating income of the business -
B.
necessitates the introduction of additional capital -
C.
reduces the capital of the business -
D.
adds to or improves the value of fixed assets
Correct Answer: Option A
Explanation
This is a very correct option to the question asked. Preliminary or preoperative expenses is a good example. They are expended and have a very great contribution to the income generated.