Expenditures that are immediately charged against revenues as an expense are called:

• A. capital expenditures
• B. operating expenses
• C. revenue expenditures
• D. acquisition costs

Answer: (C)

Revenue expenditures are costs that are consumed in the current period and expensed immediately, rather than being capitalized as assets. This means they are charged to the income statement right away, reducing net income for that period. They typically keep the business operating or generate revenue in the short term, such as routine maintenance, repairs, and small, consumable items.

In contrast, capital expenditures are investments to acquire or improve long-term assets and are recorded as assets to be depreciated or amortized over time, not expensed all at once. Acquisition costs often become part of the asset’s cost and are likewise spread out over the asset’s useful life. Operating expenses is a broader category that includes many costs the business incurs in normal operation, but the term revenue expenditures specifically emphasizes those that are expensed in the period they occur.