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differ the revenue expenditure and capital expenditure
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Answer Posted / nagesh
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.
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