Question

what do you mean by capital and revenue expenditure?

Answer 1

The occurence of expenditure during the course of business is very natural. Generally, expenditure is incurred to increase the efficiency of business and further returns. These are braodly classified into two categories, i.e. capital expenditure and revenue expenditure. Capital Expenditure is an expense made to acquire an asset or improve the capacity of the asset. Conversely, revenue expenditure implies the routine expenditure, that is incurred in the day to day business activities.