true

Find the best tutors and institutes for Class 12 Tuition

Find Best Class 12 Tuition

Please select a Category.

Please select a Locality.

No matching category found.

No matching Locality found.

Outside India?

Search for topics

For CBSE PUC Accountancy- How to Identify Revenue vs Capital Expenditures for a Business Organisation

Madhura Sagar G.
09 Apr 0 0

Dear Students,

Identification of Revenue and Capital natured expenditure is essential for us. It is the base for many of the chapters in your Accountancy Syllabus. Let us understand these terms with several examples-

1. Capital Expenditure - You must have observed that some of the business expenditures give long term benefits to an organisation. Say, for example, purchasing a property, Patent rights or Automobiles, etc. Business reaps the benefit of these Assets purchased over several years. Does a Business have to buy Machinery, Land, Buildings, Trademarks, Furniture, Huge Electronic Equipment every year? The answer is "NO". A Fixed Asset purchased servers a business for many years. Thus, the purchase of Fixed Asset is a Capital Expenditure. Students, please note that Capital Expenditures are Presented in the Balance sheet.

2. Revenue Expenditure - Many business expenses have to be made multiple times in a year. These expenses comprise of purchasing Raw materials, Paying wages and salaries to the staff members, paying electricity bills, paying rent, expenditure towards freight, carriage, fuel, etc. This expenditure that is recurring in nature or has to be made almost every year are called Revenue expenses. Generally, these expenses appear in the Trading/ P&L Account.

I hope this makes the concept clear.

All the best!!!

0 Dislike
Follow 2

Please Enter a comment

Submit

Other Lessons for You

Accruals Accounting
Accruals in Accounting are the expenses or revenues that have been recorded by the firm but not yet realised. In simple terms, they are the financial transactions already estimated in the current accounting...

Nitin Saraswat | 24 Jul

1 0
0

Introduction to Chess
Chess is a game played on 64 square board which is a combination of two colours, usually black and white (nowadays different colours chess boards are available like green and white, yellow and brown). The...

Sahil Maurya | 12 Jun

0 0
0

Accounting at a Glance
Accounting is part and parcel of our daily life. We are indulging in accounting activities in our everyday life. But we are unaware of it. For example, we go for marketing with say Rs. 1000/-. We buy different...

Harihar Sabat | 28 May

0 0
0

Accountancy
Tips for scoring good marks in accounts:1. Always be attentive during the sessions2. Raise your doubts to clarify it immediately ao that it does not become your permanent doubt.3. Practice hard because...

Prabhjeet Singh | 07 Apr

0 0
0

Accounting Cycle
Accounting Cycle Transactions ↓ Journal Entries ↓ Ledger ↓ Trial Balance ↓ Final Account

Rishi Parmar | 10 Jan

0 0
0
X

Looking for Class 12 Tuition Classes?

Find best tutors for Class 12 Tuition Classes by posting a requirement.

  • Post a learning requirement
  • Get customized responses
  • Compare and select the best

Looking for Class 12 Tuition Classes?

Find best Class 12 Tuition Classes in your locality on UrbanPro

Post your learning requirement

UrbanPro.com is India's largest network of most trusted tutors and institutes. Over 25 lakh students rely on UrbanPro.com, to fulfill their learning requirements across 1,000+ categories. Using UrbanPro.com, parents, and students can compare multiple Tutors and Institutes and choose the one that best suits their requirements. More than 6.5 lakh verified Tutors and Institutes are helping millions of students every day and growing their tutoring business on UrbanPro.com. Whether you are looking for a tutor to learn mathematics, a German language trainer to brush up your German language skills or an institute to upgrade your IT skills, we have got the best selection of Tutors and Training Institutes for you. Read more