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• CAPITAL & REVENUE EXPENDITURE .
" . directly or indirectly related togiven fiscal period. • "Expense is the expired cost. • Hendriksen opines. of the flow of goods or services into themarket and of related operations. "expenses are the using or consuming of goods and services in the process of obtaining revenues".Expenditure • The use of goods and services in order to earn revenue is theexpense.
Expenditure • Expenditure incurred during the fiscal period and related to same accounting period becomes an expense i. • Expenditure related to the current accounting period but not paid becomes outstanding expenses. expired cost of that period. prepaidexpenses.e. expired cost of the current accounting period e.e. • Expenditure incurred during the previous accounting period but related to current accounting period becomes an expensei.g. .
Expenditure • Expenditure is usually of two types • (a) Capital expenditure. and • (b) Revenue expenditure. .
Capital and Revenue Expenditures Increases operating efficiency or adds to capacity Capital Expenditure (Debit fixed assetaccount) .
Capital and Revenue Expenditures Revenue Expenditure(Debit expense account for ordinary maintenance and repairs) Increases operating efficiency or adds to capacity? Capital Expenditure(Debit fixed assetaccount) Capital and Revenue ExpendituresCapital and Revenue Expenditures Increases useful life (extraordi nary repairs)? .
Capital and Revenue Expenditures .