(C3) Types of Expenditure Flashcards
Types of Expenditure
- Capital Expenditure
- Revenue Expenditure
What is capital expenditure?
Assets that the business has a long term investment in
Types of Capital Expenditure
- Non-Current (tangible) Assets
- Intangible Assets
Types of Non-Current Assets
- Land
- Buildings
- Machinery
- Vehicles
What are intangible assets?
Assets that aren’t physical items which may be difficult to value and sell
Types of Intangible Assets
- Patents
- Trademark
- Goodwill
- Brand Name
What is goodwill?
The additional value of a business, the measure of the number of customers and its reputation
What is depreciation?
The fall in the value of non-current assets
Types of Depreciation
- Straight-Line Deprecation
- Reducing-Balance Depreciation
What is straight-line deprecation?
When an item decrease by the same value every year
What is reducing-balance depreciation?
when the rate of depreciation is calculated to be higher in the early years
What is revenue expenditure?
The day to day cost of running a business
Types of Revenue Expenditure
- inventory
- rent
- taxes
- Utilities
- insurance
- administration
- wages
