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متابعة

Explain the term Capital Expenditure & Revenue Expenditure?

user-image
تم إضافة السؤال من قبل Masumali Saiyed , Chief Accountant , Osh United Company
تاريخ النشر: 2015/12/02
Anil Lalwani
من قبل Anil Lalwani , Chief Accountant , Al Ahli Hospital

In every business, let it be trading or service type of business, we use to make various types of expenses.

The main aim behind paying any expense is to get benefit now that benefit may last longer or shorter.

For example if we pay salary the benefit will be about one month or if we pay rent the benefit will be one

month, so all those expenses the benefit of which is exhausted within a year is a revenue expenditure

on the other hand if the benefit of expenses is for longer period i.e. more than a year is capital expenditure, for example amount paid for purchase of asset like building machinery etc. is a capital expenditure because benefit will be enjoyed more than a year.

The important point to be noted here is that amount is not at all a focus point so as to decide a expenditure as capital or revenue. Some time small amount of expenses may be capital and large amount may be revenue and vice versa.  

Rode Dilemma
من قبل Rode Dilemma , موظف ادارى , العلا

 

Economy the best term to capital expenditure

                                                                                 

المزيد من الأسئلة المماثلة

هل تحتاج لمساعدة في كتابة سيرة ذاتية تحتوي على الكلمات الدلالية التي يبحث عنها أصحاب العمل؟