List of Differences between Revenue and Capital Expenditure

Expenditure refers to the outlay of cash from the company to the outsiders. Here is the list of differences between revenue and capital expenditure –

1. Revenue expenditures refers to those expense which are incurred for maintain the assets and sales of the products of the company while capital expenditures refers to those expense which are incurred to buy the assets.

2. While revenue expenditures are incurred daily, in other words it is of recurring nature while capital expenditures are incurred once in a while and therefore it is of non recurring nature.

3. While revenue expenditures is recorded in the profit and loss account of the company whereas capital expenditures are recorded in the balance sheet of the company.

Sometimes it is difficult to differentiate between revenue expenditures and capital expenditure because some expenses are of such nature that they can be classified as either revenue expenditure or capital expenditure and therefore it is important carefully look expense before classifying it as either revenue expenditure or capital expenditure.

0 comments… add one

Leave a Comment