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    Difference Between Capital and Revenue Expenditure

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    b j h
    Capital expenditures are long-term investments in fixed assets like property, plant, and equipment that are depreciated over several years. Revenue expenditures are short-term operational costs like salaries, rent, and supplies that are expensed within one year. While capital expenditures expand a company's ability to generate earnings over time, revenue expenditures are necessary costs to maintain daily business operations and keep assets functioning properly.

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    Difference Between Capital and Revenue Expenditure

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    b j h
    121 views1 page
    Capital expenditures are long-term investments in fixed assets like property, plant, and equipment that are depreciated over several years. Revenue expenditures are short-term operational costs like salaries, rent, and supplies that are expensed within one year. While capital expenditures expand a company's ability to generate earnings over time, revenue expenditures are necessary costs to maintain daily business operations and keep assets functioning properly.

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    DIFFERENCE BETWEEN CAPITAL AND REVENUE EXPENDITURE

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    Capital expenditures are long-term investments in fixed assets like property, plant, and equipment that are depreciated over several years. Revenue expenditures are short-term operational costs like salaries, rent, and supplies that are expensed within one year. While capital expenditures expand a company's ability to generate earnings over time, revenue expenditures are necessary costs to maintain daily business operations and keep assets functioning properly.

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    Download as docx, pdf, or txt
    121 views1 page

    Difference Between Capital and Revenue Expenditure

    Uploaded by

    b j h
    Capital expenditures are long-term investments in fixed assets like property, plant, and equipment that are depreciated over several years. Revenue expenditures are short-term operational costs like salaries, rent, and supplies that are expensed within one year. While capital expenditures expand a company's ability to generate earnings over time, revenue expenditures are necessary costs to maintain daily business operations and keep assets functioning properly.

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    DIFFERENCE BETWEEN CAPITAL AND REVENUE EXPENDITURE:

    CAPITAL EXPENDITURE: REVENUE EXPENDITURE:


     Capital expenditures are fixed  Revenue expenditures are short-term
    assets like property plant and expenses used in the current period
    equipment. or typically within one year.
     revenue expenditures are
     Capital expenditures are typically expensed in the current year or
    expensed over many periods period.
    or years through depreciation.
     whereas revenue expenditures
     Capital expenditures are funds used include the operational costs of
    by a company to acquire, upgrade, running a business and the
    and maintain physical assets such as maintenance costs that are necessary
    property, industrial buildings, or to keep the asset in working order.
    equipment. Capital expenditures
    are often used to undertake new
    projects or investments by a
    company. Typically, the purpose of
    capital expenditures is to expand a
    company's ability to generate
    earnings.

     A capital expenditure is assumed to  A revenue expenditure is assumed


    be consumed over the useful life of to be consumed within a very short
    the related fixed asset. period of time.

     Examples of capital expenditures are  All expenses incurred in the ordinary


    as follows: Buildings (including conduct of business, such as rent,
    subsequent costs that extend the salaries, wages, manufacturing
    useful life of a building) Computer expenses, carriage, commission, legal
    equipment. Office equipment. charges, insurance and
    Furniture and fixtures (including the advertisement, free samples, salaries,
    cost of furniture that is aggregated postage expenses etc.
    and treated as a single unit, such as a
    group of desks)

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