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Can You A Example Of Capital Expenditure And Revenue Expenditure?

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Anonymous Profile
Anonymous answered
Capital Expenditure    Capital expenditure consists of expenditure, the benefit of which is not fully enjoyed in one accounting period but spread over several accounting periods. It includes assets acquired for the purpose of earning income or increasing the earning capacity of the business or effecting economy in the operation of an asset. These are not meant for sale. Expenditure incurred for improving assets and extending an existing asset is also capital expenditure.    The sum of invoice price, freight and insurance charges, installation and erection cost and custom duty etc. Will be capitalized in the books of a firm. These capital items appear on the assets side of Balance Sheet.      (a) Interest on capital paid during the period of construction of Company (you/s 208 of Indian Companies Act)    (b) Expenditure in connection with or incidental to the purchase or installation of an asset.    (c) Acquisition of new assets.    (d) Expenditure incurred for putting the old asset purchased, into working condition.    (e) Additions and extensions to existing assets.    (f) Interest and financing charges paid, brokerage and commission paid.    (g) Betterment of fixed assets or improvement of an asset to produce more, to improve its earning capacity or to reduce its operating expenses or to increase the life of asset.    Revenue Expenditure    Revenue expenditure consists of expenditure incurred in one period of the accounting, the full benefit of which is enjoyed in that period only. This does not increase the earning capacity of the business but it is incurred in order to maintain the existing earning capacity of the business. It includes all expenses which arise in normal course of business. The benefit of such expenditure is for a short period, say, one year only and it is not to be carried forward to the next year. The expenditure is of a recurring nature i.e. Incurred every year.    Examples:    (a) Purchase of raw materials for conversion into finished goods.    (b) Selling and distribution expenses incurred for sale of finished goods e.g. Sales office expenses, delivery expenses, advertisement charges, et(%    (c) Establishment expenses like salaries, wages, rent, rates, taxes, insurance, depreciation on office equipment.    (d) Depreciation of plant, machinery and equipment.    (e) Expenses incurred in order to maintain the existing fixed assets in an efficient and workable state such' as repairs to building, repairs to plant, white-washing and painting of building.
Anonymous Profile
Anonymous answered
Example of capital expenditure when any person who purchase the mobile phones for business purpose that is capital for him AND REVENUE is that when he charge the mobile and load the cell phone tht is revenue expenditure.
amber Jhon Profile
amber Jhon answered
The costs which a company incurs in its business operations are known as expenses and the companies can consider them either as a revenue expense or a capital expense. If the expense is recognized in the same accounting period and it is deducted from the income statement then it is known as a revenue expenditure. On the other hand, if the expense is very huge and the expense can be distributed in more than one accounting periods then it is capitalized and it is known as a capital expenditure. In this case, the capitalized expense is entered in the balance sheet and after each accounting period a portion of it is depreciated from the income statement.
Theo  Rowland Profile
Theo Rowland answered
Example of capital expenditure include buying fixed assets of long term value to the business,these items has to be used for a lifetime of more than a year in the business,example include purchase of van,buildings,and furniture

revenue expenditure is that expenditure incurred in the day to day running of the business, this will include buying petrol for the business van, paying for the repairs of the broken window
Anonymous Profile
Anonymous answered
Capital expenditures are those expenditures that are incurred to improve the revenue earning capacity of fixed assets. Fixed assets are those assets that cannot be replaced unless the company goes into liquidation. For example Plant & Machinery, Building, Furniture etc. Hence whenever an expense is incurred the benefit of which can be enjoyed not only in the present year but future years as well, we term it as a capital expenditure.
Revenue expenditure on the other hand are all those expenditures the benefit of which can be derived in the present year only. It is an expense incurred with respect to the present year.
Anonymous Profile
Anonymous answered
Capital expenditure are those expenditure that increase the life of an Fixed Assets are purchases of new Assets. The expenses are occure from purchase of an assets to instal an assets in own organization i.e cr rige inwards , installation charges,discount inward,etc that occure first time to install an assets.  If a expence occure on assets that increase the working capacity of an assets or increas the life time of an assets is called capital expenditure.
amber Jhon Profile
amber Jhon answered
Revenue expenditure is an amount which is expensed immediately in the current accounting period. For example, the routine repairs and the maintenance expenses are the revenue expenses. Revenue expenses are expensed in the current accounting period because the cost does not extend beyond the life of the asset. On the other hand, a capital expenditure is the amount which is spent to acquire the long-term assets like for purchasing plant, property and equipment. The cost is entered as an asset in the balance sheet and depreciation is expensed after each accounting period.

Coming towards the second part of your question:

The first objective of the budgetary policy is the right and efficient allocation of the resources for example, distribution of income in various sectors. Secondly, it is aimed to stabilize the macroeconomic indicators in an economy like inflation, unemployment etc. Third objective is to increase the developments in the economy like to increase literacy rate by making new institutions. Fourth objective is to deal with the social issues and problems. Moreover, another aim of budgetary policy is to establish new revenue policy like tax rate determination for collecting tax revenues.
Anonymous Profile
Anonymous answered
Amber22's answer is pretty good, but the life-time of an expense item is more important than the size of the expense. A capital expense need not be huge: A screwdriver purchased for use in a business, with a life of, say, three years is also a capital expense, even though its cost is a few dollars.
Anonymous Profile
Anonymous answered
Is overhauled and reconstructed lathe motor to produce moe parts per hour a capital expenditure
Anonymous Profile
Anonymous answered
"Revenue expenditure" has got to be the most stupid term I have ever seen in an accounting sense. Not to take away from the explanation of Amber22, but the examples described are just regular day-to-day EXPENSES. NOT REVENUE EXPENSES. Revenue and expenditure are two fundamentally different terms that cannot be combined.

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