C3 Types of Expenditure Flashcards
What is Expenditure ?
Expenditure is money spent by a business
What are the 2 types of Expenditure ?
Capital Expenditure and Revenue Expenditure
What is capital expenditure ?
It is money used to buy capital items , which are assets that will stay in the business for a long period of time
What is Revenue Expenditure ?
It is spending on items on a day to day or regular basis
What are Capital Items ?
They are the assets that will stay in the business for a long period of time . They are non - current assets and intangable assets.
What are Non - current assets ?
They are items owned by a business that will remain in the business for a long period of time.
what are some examples of Non - current assets ?
Land
Buildings
Equipement
Machinery
Vehicles
What are intangable assets ?
It is something owned by the business , that cannot be touched but adds value to the business
what are some examples of Intangible assets ?
Goodwill
Patents
Trade marks
What is the meaning of goodwill ?
Name
Reputation
customer connection
why is Goodwill Important ?
This increases the value of the business and therefore the selling price of a business
What is a Patent and why are they important ?
It is a legal protection of an invention.
An entrapenaur may patent their ideas to prevent other copying it.
It allows a business to exploit this in the future by launching an innovative product at premium price.
It can therefore hold monetary value.
