What Do You Mean By Capital Expenditure And Revenue Expenditure?
Capital Expenditure: All expenditure incurred in acquiring fixed assets, or improving the existing ones by increasing its efficiency (e.g. by providing substitution, alteration or renovation), or effecting economy in operation of existing assets (e.g. by attaching power motor to hand driven machine) are called capital expenditure. Revenue Expenditure: They are all such expenses, which are incurred on the organization and for running the business. The benefits of such expenses are limited to the accounting period only. They are incurred to maintain the earning capacity of the business, whereas capital expenditure are incurred to improving the earning capacity of the business.
