Question

Q2. Distinguish between revenue expenditure and capital expenditure.
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Answer 1

Answer:

capital expenditure : A capital expenditure is assumed to be consumed over the useful life of the related fixed asset.Capital expenditures are charged to expense gradually via depreciation, and over a long period of time.

revenue expenditure: A revenue expenditure is assumed to be consumed within a very short period of time. Revenue expenditures are charged to expense in the current period, or shortly thereafter.

Explanation:

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