A capital expenditure includes all costs incurred on the acquisition of a fixed asset along with subsequent expenditures that increase the asset's earning capacity, while revenue expenditure only includes costs that are aimed at maintaining fixed assets and not enhancing earning capacity. The distinction between capital expenditure and revenue expenditure is important because only capital expenditures are included in the cost of a fixed asset.Know More
Capital expenditure includes all costs of acquisition, such as delivery, legal charges, installation, upgrade and replacement costs. Capital expenditure is generally of a one-off expense, and its benefit is derived over several accounting periods. For example, the cost of replacing a conveyor belt on an assembly line is a capital expenditure. For accounting purposes, a capital expenditure requires a debit to the fixed asset account and a credit to accounts payable.
Revenue expenditure includes the costs of maintaining a fixed asset, such as repair, repainting and renewal costs. These costs are incurred on a regular basis, and their benefits are obtained over a relatively short period of time. Since revenue expenditures do not show up in the cost of a fixed asset, they are expensed in the income statement for the period in which they are incurred. Therefore, a revenue expenditure requires a debit to the income statement and a credit to accounts payable.Learn more about Accounting
In accounting, the word "expenditure" is used to indicate a cost that a company pays to acquire equipment or other assets. Expenditures can also reduce liabilities or be disbursed to owners. They can be considered a type of expense, but expenses and expenditures are listed differently on income statements. Expenditures usually span a period of more than one statement.Full Answer >
Total expenditure is an economic term used to describe the total amount paid on one or more products in a given period, according to AmosWEB. To calculate the total expenditure multiply the quantity of the product purchased by the price at the time it was purchased.Full Answer >
An income and expenditure account is a record showing debits and credits for an organization within a particular time period. Income and expenditure accounts are also referred to as profit and loss accounts. Generally, these accounts are credited with debits and credits, whether paid or not. As a rule, transactions of a capital nature, such as payments for vehicles or sales of machinery, as well as donations from a will, should not be included in this account.Full Answer >
According to About.com, sales can account for a part or the whole of a company's revenue. Revenue is the amount of money that a company earns from its primary activities. If a company's primary activity is sales, such as a retail corporation, then revenue is the same as sales. If a company has different revenue streams, such as sales and rental income, then sales accounts for a portion of revenue.Full Answer >