Flashcards in Capital and Revenue Deck (4)
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1
Q
Capital expenditure
A
expenditure incurred purchasing fixed assets or expenditure incurred with the improvement of fixed assets.
Several accounting periodss
Can generate income
Fixed asset as well
2
Q
Examples of capital expenditure
A
Delivery cost of an asset
Legal cost associated with the purchase of premises and land
Installation cost of an asset
Architect fees and costs of supervision of construction
Even the costs associated with demolition to clear any obsolete buildings can be ‘capitalised’
3
Q
Revenue Expenditure
A
Running expenses and maintenance expenses
within 12 months
does not add value to fixed assets
4
Q
examples of revenue expenditure
A
maintenance and running costs
Repairs to fixed assets
Salaries and wages
Rents and rates