Explore BrainMass
Share

Capital and Revenue Expenditures

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Capital expenditure increases an asset's capacity or useful life. On the other hand, revenue expenditures help in maintaining an asset or restoring it to working condition.
Consider the features of capital and revenue expenditure and respond to the following:

•List five points of difference between capital and revenue expenditure.
•Why is it necessary to distinguish between capital and revenue expenditure while preparing accounts?

© BrainMass Inc. brainmass.com October 25, 2018, 9:42 am ad1c9bdddf
https://brainmass.com/business/capital-budgeting/capital-and-revenue-expenditures-583674

Solution Preview

•List six points of difference between capital and revenue expenditure.

Nature is a point of difference wherein capital expenditures is predicated upon a non-recurring nature while revenue expenditures are of a recurring nature. Purpose is another point of difference wherein capital expenditure is incurred when acquiring permanent assets or when attempting to improve their existing ...

Solution Summary

A discussion on the difference between capital and revenue expenditures

$2.19
See Also This Related BrainMass Solution

Capital Vs. Revenue Expenditure

Explain the difference between a capital expenditure and a revenue expenditure. Also, give an example of each and explain the difference in the method of accounting for each expenditure. Explain if there are times that it would be in management's best interest to "shift" an expenditure from a capital expenditure to a revenue expenditure? A short paragraph is needed.

View Full Posting Details