Jul 27, 2017

What is the difference between revenue and capital expenditures?

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Long-Term Assets


What is the difference between revenue and capital expenditures? How are each accounted for? Provide examples of each.

Long-term assetsNameCourse number Instructor’s nameDateFixed assets have costs or expenditures that are either categorized as capital or revenue based. Capital expenditure involves the cost incurred to purchase a fixed asset and the resultant costs that contribute to the assets capacity for more earnings. Capital expenditure primarily includes a one off purchasing cost and other associated costs that contribute to increasing the earning capacity of the fixed asset. In accounting, capital expenditure is amortized and added to the value of the fixed assets on the balance sheet and is not charged to the trading and profit or loss account (Jefferson P. Jones,...

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