Question

16) Which of the following expenditure is on the basis
of the said business needs and their ability to pay for
them?​

Answer 1

Answer:

Expenditure vs Expense

It’s important to understand the difference between an expenditure and an expense. Though related, they’re actually different and have some important nuances you must know about.

Expenditure – This is the total purchase price of a good or service. For example, a company buys a $10 million piece of equipment that it estimates to have a useful life of 5 years. This would be classified as a $10 million capital expenditure.

Expense – This is the amount that is recorded as an offset to revenues or income on a company’s income statement. For example, the same $10 million piece of equipment with a 5-year life has a depreciation expense of $2 million each year.