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SSC Financial and Cost Accounting P-1
QUESTION #6061
Question 1
A house building advance of Rs. 2 million is paid to employees. In accounting terms, this payment is classified as a:
Correct Answer Explanation
An advance paid to employees (such as a house-building advance) creates a receivable for the organization — the employee owes the money back. It is therefore recorded as an Asset (specifically a long-term receivable or loan to employees) on the balance sheet. It is not an expense until it is written off or adjusted, so it is neither revenue expenditure nor capital expenditure in the traditional sense.
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