Question

Definition and example of revenue expenditure and capital expenditure deferred revenue expenditure and capital loss

Answer 1

1 ) A capital expenditure is an amount spent to acquire or improve a long-term asset such as equipment or buildings. Usually the cost is recorded in an account classified as Property, Plant and Equipment. The cost (except for the cost of land) will then be charged to depreciation expenseover the useful life of the asset.

2 ) A revenue expenditure is an amount that is expensedimmediately—thereby being matched with revenues of the current accounting period. Routine repairs are revenue expenditures because they are charged directly to an account such as Repairs and Maintenance Expense. Even significant repairs that do not extend the life of the asset or do not improve the asset (the repairs merely return the asset back to its previous condition) are revenue expenditures.

Answer 2

Answer:

1)  EXAMPLES FOR CAPITAL EXPENDITURE , PURCHASE OF CAR TO BE USED TO DELIVER GOODS

 2)  EXAMPLES FOR REVENUE EXPENDITURE , THE COST OF PETROL OR DIESEL FOR CARS

 3)  CAPITAL LOSS , THE LOSS SUFFERED BY A COMPANY ON THE SALE OF FIXED ASSETS

   

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