What Is the Difference between Capital and Revenue Expenditure?


Capital expenditure refers to an expense resulting in acquisition of an asset or increase in the earning capacity of a business. Revenue expenditure is defined as an expense that is essential for the maintenance of earning capacity of a business.
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Capital expenditures are funds used to acquire or upgrade fixed assets that will benefit the business in the future. Revenue expenditures are expenses incurred for daily operation but have a shorter term benefit.
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Revenue is defined as spending on day-to-day items to run services while capital is spending on significant assets that will have a life of many years, such as ...
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