It can be categorised as capital expenditure or revenue expenditure. What is a capital expenditure versus a revenue expenditure? On the other hand, no asset is acquired as such in the case of a Revenue Expenditure. endobj
Finance professionals can use this entirely editable deck to discuss how CapEx enhances the scope of operations for the business and generates revenue for many years by boosting operational efficiency. Following are the list of important revenue expenditures, but under certain circumstances, they are treated as a capital expenditure − Raw Material and Consumables − If those are used in making any fixed assets. O�Z#/�lN�#�#���P��1+�FR��١q��w۠/)GZ!��!s������mUʢ��&���tu��Q4�r0K�A��,��#�aB�qB�-���B*}�? <>
These are recurring in nature and are allocated to the profit and loss account of the same year. 3 Capital and Revenue.pptx from FINANCIAL ACCT6003 at Parul Institute of Engineering and Technology. Read more. endobj
Capital expenditures (CAPEX) are … Welcome to “Capital and Revenue Expenditure and Receipts” topic. ��~�{h�-�o��r�� �B��j6�]��o�6tLy��T�B��ϰ�g�%S��=����9�de`�$0Q�y�@U�ъ�$6� �2H����"��j� �~��(RQd��'��wfZ��*O��(KK�7m�������q߅78�u�����31�����)t|�0��o��O_ӗ�R���_d�"3�"s�}b^Xloڇ�Ȍ�|�g��>&0���XdGJ It’s not enough to say that capital expenditures are everything that revenue expenditures aren’t. Reply. I think it is better to go through this MCQ’s. Capital Expenditure found in: Capital Expenditure Details Ppt Show, Capital Expenditure Details Ppt Outline, Capital Expenditure Details Ppt Topics, BMW Group Capital Expenditure 2014-18, Capital Expenditure Powerpoint.. Toggle Nav. ���vdZe#���ۣ���cJ� �.���)�\�sঔ4B�)t��鷰!��c(.��"��6T��)>}�����2������Eea3��F/h�')�s��PS�Q� .Zk��.b����. Weaknesses in revenue and expenditure management could constrain the ability of a municipality to contribute to poverty reduction and economic development. When an accountant consider revenue expenditure as capital expenditure, it will overstate the profit of the company and non-identifiable fixed assets will arise. 1 0 obj
The benefits of revenue expenditures usually expire within one financial year and their budget is smaller as compared to capital expenditures. <>
Created: Jan 5, 2011. ppt, 122 KB. 1938 0 obj
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Usually the cost is recorded in a balance sheet account that is reported under the heading of Property, Plant and Equipment. Report a problem. 2. 1932 0 obj
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In the case of a capital expenditure an asset has been purchased by the company which generates revenue for upcoming years. stream
Capital and Revenue expenditure. Other transactions are of capital nature. A capital expenditure is an amount spent to acquire or significantly improve the capacity or capabilities of a long-term asset such as equipment or buildings. Plus, capital expenditures will show up differently on your reporting metrics. The revenues and expenditures of municipalities determine their ability to deliver services. UNIT 1 CHAPTER 3 CAPITAL AND REVENUE EXPENDITURE CAPITAL EXPENDITURE: CAPITAL Cartage and Freight − If those are incurred to bring Fixed Assets. 4 0 obj
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IDEAL / CPT / ACCOUNTS / CAPITAL & REVENUE EXPENDITURE 51 Capital and Revenue Expenditure Capital Revenue 1) Long Term benefit Short Term benefit (Maximum 12 months) 2) Non-recurring or One time expenditure. About this resource. <>/XObject<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S>>
upgrading/maintaining the long-term assets with our Capital Expenditure (CapEx) PowerPoint template. Most of the accountants often confuse regarding capital and revenue expenditure, particular who come from non-accounting back ground. Search. business expense that is made to acquire an asset or to improve the capacity of an asset %PDF-1.5
capital and revenue 1.1 topic 1. capital and revenue expenditures and receipts 1946 0 obj
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Expenditure means spending on something. Search Skip to Content. The differences between capital expenditures and revenue expenditures include whether the purchases will be used over the long-term or short-term. 0
After completing this chapter, you should be able to : 1. Back to: Capital and revenue items (quizzes) Show your love for us by sharing our contents.
Multiple choice questions (MCQs) Chhavi sharma . ��S��(r�T��7Q�E'. Capital expenditures vs. revenue expenditures. You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments.. Revenue expenditure • Day-to-day running of business. They are either expensed in the income statement (revenue expenditures) or capitalized as fixed assets in the balance sheet (capital expenditures). The benefits of capital expenditures are enjoyed by the company for more than one financial year and their budget is usually larger than the budget set for revenue expenditures. -- Created using PowToon -- Free sign up at http://www.powtoon.com/youtube/ -- Create animated videos and animated presentations for free. Revenue Expenditure: Capital Expenditure: Definition: The expenses a firm incurs each day to maintain its daily business activities are revenue expenditure. Capital and revenue items. %����
Capital expenditure 5. Nice. Free. Capital expenditure constitutes those expenses that are typically incurred while acquiring capital assets or upgrading the current ones. Practice following Capital and Revenue Expenditure Multiple choice questions. Capital Expenditure and Revenue Expenditure both are important for business for earning a profit in the present as well as in subsequent years. 2 0 obj
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Capital expenditure 6. Capital expenditures; Revenue expenditures; Capital expenditures Definition and explanation of capital expenditures: An expenditure is a capital expenditure if the benefit of the expenditure extends to several trading years. Deferred Revenue expenditure 7. This is so because repair and maintenance costs do not increase the earning capacity of the machine but only maintains it (i.e. Capital expenditures are usually one off and they include the substantial investments of money or capital that a government makes for the purpose of expansion in various sectors and different business in order to generate profits. Both have its own merits and demerits. It refers to the distinction of capital from revenue expenditure for tax purposes. Revenue expenditure 3. Preview and details Files included (1) ppt, 122 KB. If you are new to accounting, the difference between capital expenditures and revenue expenditures can seem a bit confusing. These expenditures are generally for the purchase of fixed assets or assets with a long life. Reply. Revenue Expenditure Treated as Capital Expenditure. Syed alfaz . The benefit of the revenue expenditures is received in the same accounting year itself. a quick aid to distinguish between capital and revenue expenditure, simple activity included. Activity slide could be used as a Plenary!!! 7 Capital Expenditure and Revenue Expenditure Reference: Chapter 20 (p.221) 21 (p. 258) A Reasons to distinguish ... – A free PowerPoint PPT presentation (displayed as a Flash slide show) on PowerShow.com - id: 6c2a9d-MGE0M x��Z[o�~7����bd�"))(ě�H��胷㙱��z�hf�����)�I봏�a["y���E�7�_}�������B�~��F��s#n�./r��ryq��?�͏�������*p0�UVV�����n//���ؿy�5����xR��J�:��GZ��J(T!�2� R,��d_���JmdE����4։W��n�-�b�-������VdŢ#K�4C^��ei�r��(/f�Rc���N�x�g����2�HU��qF�fK��ff��Ç� �X,�w�R/>>S�����^(�_�U�r�j^�Q_�Z��{�w䯀�Q�AＦ���ْ����'����=�w��v�ϖ�b�O-[j��dž*j\� �Fw܀zݠǞ�?���5-�U�����j�8�X�x� Revenue expenditure is money being spend on items used on a regular basis such as buying stock to sell or paying staff payslips. View Chapter no. Revenue expenditure refers to expenses incurred in the day to day running of the business. It is the process of causing a liability by a commodity. 3) Recorded in balance sheet Recording in Manufacturing, Trading or Profit and Loss A/c Deferred Revenue expenditure . Distinguish between capital and revenue expenditure 2. Capital expenditure 8. They break down differently, depending on the size of the payment and the time across which it needs to be paid for. Capital & Revenue expendituRe. Capital expenditure • Buy fixed assets or • Add to the value of an existing fixed asset. SlideTeam added 396 new products and 5544 new slides in the past 24 hours. Notifications 5. Capital and Revenue Income and Expenditure - Free download as Powerpoint Presentation (.ppt / .pptx), PDF File (.pdf), Text File (.txt) or view presentation slides online. Thank you . Again, sometimes accountants may show revenue expenses as capital expenses for overstating the profit and getting incentives. Definition of Capital Expenditure. 3 0 obj
This can be a payment is cash or can also be the exchange of some valuable item in exchange for goods or services. Search. <>
Capital and Revenue Expenditure. J�� �'(�6r�����vڈ6�hrB�@ XXY�X������Nq����7;� }M�Ci�!9>��29B�k�����!�Me��������j鱘..�K��V�|����fO��ۓ�F�����j��kwZ�;m� ���&K Whereas the initial purchase and installation costs would be classified as capital expenditure, any subsequent repair and maintenance charges incurred in the future will be classified as revenue expenditure. 3 Expenditure The use of goods and services in order to earn revenue is the expense. Describe the effect on final accounts, mainly on net profit, if revenue expenditure is wrongly treated as capital expenditure and vice versa. One must be clear in one’s mind regarding the nature of an item of expenditure. You can use this creatively designed set to explain how capital expenses differ from operating … Capital Expenditures Team 6 Managerial Accounting Nov. 2, 2006 Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Unlike capital expenditures, these are not carried forward to future years. Business expenditures are accounted for in either one of the two ways. Capital receipt 4. Capital and Revenue expenditure. %PDF-1.7
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Capital expenditure is when fixed assets are bought into the company, these are called capital items. ‘Capital v Revenue expenditure’ is a term used throughout this toolkit. Capital Expenditure found in: Capital Expenditure Details Ppt PowerPoint Presentation Infographics Guide, Capital Expenditure Details Fy 18 Ppt PowerPoint Presentation Summary Themes, Capital Expenditure Valuation Methods Ppt.. Please click here to … Before we explore this part of accounting study material at Accounting-Daddy.com, let’s examine what Cambridge wants us to learn under this title at secondary education level: hތR;KA����O%h�$���� 3. �a�� /�a''|�|�g�{�"�_�e��� Distinguishing between capital and revenue expenditure Author(s): Mark POOLE Materials from this session: insert_chart Duration: Revenue expenditure is made during the short-term. 5. If you continue browsing the site, you agree to the use of cookies on this website. endstream
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Receipts and invoices keep the records of expenditures. Recurring or Regular expenditure. Capital and Revenue Expenditure and Receipts. An expense is a word very similar to expenditure but expense shows the deduction in the value of the asset while expenditure simply denotes the obtaining of as… Difference between Revenue Expenditure and Capital Expenditure. On the other hand, when capital expenditure … Capital Income and Expenditure, Revenue Income and Expenditure and Deferred Revenue Expensiture The Concept of Capital and Revenue Expenditure: Expenses, losses, and incomes are also known as revenue items since they together will show up the net profit or revenue earned. ;�=��l�q�ni���9����U�Z9�
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