Capital & Revenue Expenditure

Question 1

what is capital expenditure

Answer 1

• adding value to the asset, improve initial value
• Examples: fray cost, delivery cost, set up cost
• expenditure resulting in the acquisition and installation of an asset whose life will extend over more than one accounting period
• the expenditure is capitalised

Question 2

what is revenue expenditure?

Answer 2

• short-term business expenses usually used immediately or within one year
• continuous expense
• Examples: fuel prices, yearly maintenance

Question 3

What is the term non current assets?

Answer 3

a company’s long-term investments that are not easily converted to cash or are not expected to become cash within an accounting year.

Question 4

Make a list of non current assets?

Answer 4

Tangiable: buildings, vehicles, furniture, and equipment

Intangiable: computer software, licences, trademarks, patents, films, copyrights and import quotas

Natural Resources: water, gas