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Capital and Revenue Expenditures

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?

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•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

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