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what is the difference between capital and revenue
expenditure
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Answer / g.ravi
Revenue expense are costs in the for day to day running of
the business for example servicing a machine, spare parts
etc. Revenue expenditure is normally charged against profit
in the Income statement in the year it is expensed.
Capital expenditure is on an item that will help generate
profits over the longer term (12 months or more) so a
purchase of a machine or van etc. The item is depreciated
over the items useful life and each depreciateable amount
is charged to the Income statement in the year the item has
help generate profit
| Is This Answer Correct ? | 69 Yes | 7 No |
Answer / rekha
In simple words,
Revenue expenditure is an expenditure incurred in daily
business transactions.
Capital expenditure is an expenditure incurred for long
term assets.
| Is This Answer Correct ? | 28 Yes | 9 No |
Answer / a.t. faisal
revenue expenditure is the expense incurred for deriving short term benefits say one year or less
capital expenditure is the expense incurred for deriving long term benefits say more than one year.
| Is This Answer Correct ? | 20 Yes | 3 No |
Answer / naveen
revenue Exp., means one transaction which can benefit and
that tran..repeats in one a/cing year.
Ex: printing & Stationery , Salaries Etc.,
capital Exp., which transaction benefit the more than one
accounting year Ex; Plant7Machinery , Buildings etc.,
| Is This Answer Correct ? | 9 Yes | 2 No |
Answer / dfg
CAPITAL EXPENDITURE: Outlay resulting in the increase or
acquisition of an asset or INCREASE in the earning capacity
of a business
REVENUE EXPENDITURE: Outlay as is necessary for the
MAINTENANCE of earning capacity including the upkeep of the
fixed assets in a fully efficient state.
| Is This Answer Correct ? | 6 Yes | 2 No |
Answer / sham
REVENUE EXPENDITURE: Revenue Expenditure are the
expenditures which are incurred for maintaining or
retaining the existing earning capacity of a business
organization.
CAPITAL EXPENDITURE: Capital Expenditure are the
expenditures which are incurred for increase the existing
and future earning capacity of a business organization.
| Is This Answer Correct ? | 6 Yes | 2 No |
Answer / yash mahendru
Treating an expense as Capital or Revenue expenditure is
depandant on the nature, type,period and benefits derived
from that expenditure.
If the expenditure incurred improves the effeciency of the
assets etc; it will be treated as Capital Expenditure.Any
expenditure incurred on the purchase of the assets is also
a Capital expenditure.
On the other hand, a revenue expenditure is the expenditure
incurred on rotine basis which does not enhance the
effeciency of the asset. example, general repair, rent
etc.
| Is This Answer Correct ? | 1 Yes | 1 No |
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