Question

Differentiate between revenue and capital expenditure.

Answer 1

Answer:

BASIS FOR

COMPARISON   CAPITAL EXPENDITURE      REVENUE

Meaning -

CAPITAL EXPENDITURE:The expenditure incurred in acquiring a capital asset or improving the capacity of an existing one, resulting in the extension in its life years.

 REVENUE :Expenses incurred in regulating day to day activities of the business.

Term                                             long term                           Short Term    

Capitalization                                  Yes                                   No

Shown in Income Statement & Balance Sheet        Income Statement

Outlay                                  Non-recurring                       Recurring

Benefit                    More than one year       Only in current accounting year

Earning    Seeks to improve earning capacity Maintain earning capacity  

Explanation:

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