Distinguish between capital expenditure and revenue expenditure with examples
How can the answer be improved?Jul 26, 2018 Capital expenditure is shown in the Balance Sheet, in asset side, and in the Income Statement (depreciation), but Revenue Expenditure is shown only in the Income Statement. Capital Expenditure is capitalized as opposed to Revenue Expenditure, which is not capitalized. Capital Expenditure is a long term expenditure. Conversely, Revenue Expenditure is a short term expenditure. distinguish between capital expenditure and revenue expenditure with examples
Solution: This expenditure will add nothing to the value of the building and will have no effect on the profitearning capacity of the business, so it is a revenue expenditure. (xxxii) Capital expenditure. Amount spent on painting a new factory is regarded as a part of the cost of factory building, therefore, it is a capital expenditure.