Question

Distinguish between revenue expenditure and capital expenditure of government

Answer 1

Answer:

A business organisation incurs expenditures for various purposes during its existence. Some of these expenditures are meant to bring in more profits for the organisation in the long term while some expenditures are for the short term.

The main reason for incurring expenditure is to increase the efficiency of the business and drive in higher returns. Based on the nature of the expenditure they are categorised as Capital Expenditure and Revenue Expenditure

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