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प्रश्न
Distinguish between capital expenditure and revenue expenditure.
उत्तर
| Basis | Capital expenditure | Revenue expenditure |
| 1. Nature | It is non-recurring in nature | It is recurring in nature. |
| 2. Purpose | To contribute to the revenue earning capacity of the business. | To carry on the day to day activities of the business. |
| 3. Period of benefits | Its benefit is available for a longer period. | Its benefit is obtained within one accounting period. |
| 4. Effect on profit-earning capacity | It increases the profit-earning capacity of the business. | It maintains the profit-earning capacity of the business. |
| 5. Accounting treatment | It will appear on the assets side of the balance sheet. | It will be shown on the debit side of the trading and profit and loss account depending on whether direct or indirect in nature. |
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संबंधित प्रश्न
What is revenue expenditure?
Distinguish between revenue expenditure and capital expenditure in Government budget. Give an example of each.
Explain how taxes and government expenditure can be used to influence revenue expenditure and capital expenditure?
Is the following revenue expenditure or capital expenditure in the context of government budget? Give reason.
Expenditure on purchasing computers
Calculate Autonomous Consumption Expenditure from the following data about an economy which is in equilibrium:
National income = 500
Marginal propensity to save = 0.30
Investment expenditure = 100
Giving reason, state whether the following is a revenue expenditure or a capital expenditure in a government budget:
Expenditure of building a bridge.
Measure the level of ex-ante aggregate demand when autonomous investment and consumption expenditure (1) is Rs 50 crores, MPS is 0.2 and the level of income (Y) is Rs 4000 crores.
The government uses ______ as proxy for income of households to identify the poor.
Construction of railway line is a type of ______ expenditure.
Identify the correctly matched pair of the items in Column A to those in Column B:
| Column A | Column B |
| 1. Revenue Expenditure | (a) Does not cause any reduction in government liability |
| 2. Capital Expenditure | (b) Which creates corresponding liability for the government |
| 3. Revenue Receipts | (c) Which causes a reduction in assets of the government |
| 4. capital Receipts | (d) Causes reduction in government liability. |
