Syntax error Write the difference between capital expenditure and revenue expenditure?

Write the difference between capital expenditure and revenue expenditure?

The major differences between capital expenditure and revenue expenditure are as follows −

Capital expenditure Revenue expenditure

  • Expenditure incurred in enhancing the current one or buying the new one.

  • It’s a long term expenditure.

  • Lump sum amount is required.

  • Amount is capitalized.

  • Reflects in balance sheet.

  • It’s a non- recurring in nature.

  • Improves earning capacity.

  • Expenditure is not matched with capital receipts.

  • Benefit period is more than a year.

  • Have physical presence except for intangibles.

  • Expenditure incurred to run day to day operations.

  • It’s a short term expenditure.

  • Amount is small when compared to capital expenditure.

  • Reflects in profit and loss account (income statement).

  • It’s a recurring in nature.

  • It will maintain the earning capacity.

  • Expenditure is matched with revenue receipts.

  • Benefit period is up to current year.

  • Don’t have a physical presence.
Updated on: 2020-07-24T07:10:29+05:30

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