Difference between capital expenditure and revenue expenditure best 01 ans

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Difference between capital expenditure and revenue expenditure

Meaning of Capital Expenditure:- Capital expenditure means which expenses are incurred with the intention for long term benefit is called Capital Expenditure.

DEFINITION

ACCORDING to Carter :- “Capital items are those, the benefit of which is derived over a number of Accounting periods.

Meaning of Revenue Expenditure:- Which expenditure is incurred for the current year. Benefit of which is crops in the accounting year.

DEFINITION

ACCORDING TO CARTER- Revenue items are those benefits of which are derived over the normal accounting period.

DIFFERENCE BETWEEN CAPITAL EXPENDITURE AND REVENUE EXPENDITURE

Basis of Difference	Capital Expenditure	Revenue Expenditure
Period	Capital expenditure gives the benefits beyond the accounting year. Advantage of such expenditure lasts over a number of years.	Benefit of Revenue expenditure is derived during the current accounting year.
Expired or Unexpired	It is referred to as the cost of future benefits. As well as unexpired cost.	It is that cost which provides benefit immediately after cost incurred.
Fixed Assets	Fixed assets are purchased by such cost.	Stock is purchased with such cost which is meant for sale.
Nature of Expense	It is non-recurring Expenditure.	It is Recurring expenditure.
Effects on Earning	It helps businesses to increase their earning capacity.	It helps in maintaining earning capacity.
Transfera-bility	It can be transferred for a price.	This is not transferable.
Right over Property	It gives the right to possession of property belonging to the owner.	No such rights are provided by revenue expenditure.

Conclusion:- We can understand that Capital expenditure belonged to the long term, whereas revenue expenditure is current. You need to learn their definition and meaning properly from the heart.

Important Question of Financial Account