Capital And Revenue Expenditure/Income

Question 1

Capital income

Answer 1

Income coming in by an asset over time, not by its use

Question 2

Revenue income

Answer 2

Income related to day to day trading of the business

Question 3

Capital expenditure

Answer 3

Expenditure related to the purchase of long term assets

Question 4

Revenue expenditure

Answer 4

Expenditure related to the day to day trading of the business

Question 5

Examples of revenue income

Answer 5

• Rent received

- Sales

Question 6

Examples of capital income

Answer 6

• Loans received

- Capital invested by partners

Question 7

Examples of revenue expenditure

Answer 7

• Rent

- Purchase of inventory (stock)

Question 8

Examples of capital expenditure

Answer 8

• Machinery (tangible)
• Buildings (tangible)
• Goodwill (intangible)
• Patents (intangible)