Question

Distinguish between revenue expenditure and capital expenditure of government.Give example​

Answer 1

Answer:

REVENUE EXPENDITURE :

• Maintains the earning capacity .
• Shown in trading and profit and loss A/c
• It is usually a recurring item
• It is a routine expenditure incurred in the normal course of business .

CAPITAL EXPENDITURE :

• It increases earning capacity
• It is an item of balance sheet.
• It is normally a non-recurring outlay
• Incurred in improving permanent assets not meant for resale.

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