Question

Explain the basis of classifying government expenditure into revenue expenditure and capital capital expenditure answer

Answer 1

Revenue Expenditure- Revenue expenditure refers to the expenditure which neither creates any asset nor causes reduction in any liability of the government. Capital Expenditure- Capital expenditure refers to the expenditure which either creates an asset or causes a reduction in the liabilities of the government.

Answer 2

Explanation:

Revenue Expenditure-Expenditure that neither creates an assets nor reduces a liability is called Revenue Expenditure. Capital Expenditure-Expenditure that either creates an asset or reduces a liability is called Capital Expenditure.