Capital Expenditure And Revenue Expenditure Ppt

Its effect is temporary i e.

Capital expenditure and revenue expenditure ppt. 3 recorded in balance sheet recording in manufacturing trading or profit and loss a c. 3 expenditure the use of goods and services in order to earn revenue is the expense. 258 a reasons to distinguish. The benefit is receivedwithin the accounting year 2.

On the other hand no asset is acquired. Heavy advertisement expenditure the most important factor affecting the classification is the nature of business. Need to classify expenses into capital and revenue 1. ß capital expenditure is shown on the assets side of balance sheet.

In the case of a capital expenditure an asset has been purchased by the company which generates revenue for upcoming years. To adhere to matching principle 2. ß if the revenue income is higher than revenue expenditure it will be a profit and if it is less than revenue expenditure it will be a loss. Activity slide could be used as a plenary.

Capital and revenue expenditure. To enable a true and fair view of financial statements 3. Hendriksen opines expenses are the using or consuming of goods and services in the process of obtaining revenues. Capital and revenue expenditure mms a 2.

Recurring or regular expenditure. Purchase a building rent a building. Think it over buying a van petrol costs for van repairs to van putting extra headlights on van buying machinery electricity costs of using machinery painting outside of new building. Ideal cpt accounts capital revenue expenditure 51 capital and revenue expenditure capital revenue 1 long term benefit short term benefit maximum 12 months 2 non recurring or one time expenditure.

Capital revenue expenditure 3. Examples of differences between capital and revenue expenditure. Neither an asset is acquired nor is the value of anasset increased3. A capital expenditure is money spent to buy fixed assets.

Presented by r m i. Capital expenditure buy fixed assets or add to the value of an existing fixed asset. Revenue expenditure day to day running of business. 1 heavy research expenditure 2.

Capital expenditure and revenue expenditure both are important for business for earning a profit in the present as well as in subsequent years. Both have its own merits and demerits. 7 capital expenditure and revenue expenditure reference. Capital and revenue expenditure.

Capital and revenue expenditure. Difference between capital expenditure and revenue expenditure 1. B revenue expenditure is money spent on the daily running expenses of the business. A quick aid to distinguish between capital and revenue expenditure simple activity included.

Capital expenditure revenue expenditure. Capital and liabilities are shown on the liabilities side of balance sheet.