Question

Distinguish between Capital Expenditure and Revenue Expenditure.

Answer 1

Answer:

A capital expenditure is assumed to be consumed over the useful life of the related fixed asset.

A revenue expenditure is assumed to be consumed within a very short period of time.

Answer 2

Hi Pal

Meaning of Capital Expenditure

Meaning of Capital ExpenditureThe expenditures that are incurred by an organisation for long term benefits are known as capital expenditures. These expenditures serve the purpose of increasing the capacity or capabilities of the long term asset by either enhancing or adding new assets to the organisation.

Meaning of Revenue Expenditure

Meaning of Revenue ExpenditureRevenue expenditure is referred to as the expenditure incurred by an organisation to manage the day to day functions of a business which can include employee wages, inventory, rent, electricity, insurance, stationery, postage and taxes

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