Free help with homework

Why join Brainly?

  • ask questions about your assignment
  • get answers with explanations
  • find similar questions

Distinguish between capital and revenue expenditure and state whether the following statements are items of capital or revenue expenditure: (a) Expenditure

incurred on repairs and whitewashing at the time of purchase of an old building in order to make it usable. (b) Expenditure incurred to provide one more exit in a cinema hall in compliance with a government order. (c) Registration fees paid at the time of purchase of a building (d) Expenditure incurred in the maintenance of a tea garden which will produce tea after four years. (e) Depreciation charged on a plant. (f) The expenditure incurred in erecting a platform on which a machine will be fixed. (g) Advertising expenditure, the benefits of which will last for four years.



This Is a Certified Answer

Certified answers contain reliable, trustworthy information vouched for by a hand-picked team of experts. Brainly has millions of high quality answers, all of them carefully moderated by our most trusted community members, but certified answers are the finest of the finest.
Capital Expenditure
Meaning It is incurred to increase the earning capacity of a business.
Purpose: It is incurred to acquire fixed assets to carry out operations.
Benefits The benefits of such expenditures can be availed for more than one year.
Nature: It is non-recurring by nature.
Shown: Capital expenditure is shown in the assets side of the Balance Sheet.

Revenue Expenditure
Meaning: It is incurred to maintain the earning capacity of a business.
Purpose: It is incurred to conduct day to day activities.
Benefits:  The benefits of such expenditures can only be availed for one year.
Nature: It is generally recurring in nature.
Shown: Revenue expenditure is shown in the debit side of the trading and Profit and Loss Account.
0 0 0
The Brain
  • The Brain
  • Helper
Not sure about the answer?
Learn more with Brainly!
Having trouble with your homework?
Get free help!
  • 80% of questions are answered in under 10 minutes
  • Answers come with explanations, so that you can learn
  • Answer quality is ensured by our experts