Question

Payment of honorarium to Secretary is treated as:

• A. Capital expenditure
• B. Revenue expenditure
• C. An income
• D. All of these

Hint:

Honorarium = recurring operating cost → always revenue expenditure.

Answer 1

The Correct Option is B

Step 1: Meaning of honorarium.
Honorarium = payment made to someone (like Secretary, Treasurer) for services voluntarily rendered to the organisation.
Step 2: Nature of expense.
It is recurring in nature and is part of day-to-day operations → hence, it is a revenue expenditure.
Step 3: Eliminate wrong options.
- Capital expenditure → creates asset, not applicable.
- An income → completely wrong.
- All of these → cannot be correct as it is specifically a revenue expenditure.
Final Answer: \[ \boxed{\text{Revenue expenditure}} \]