Differentiate between capital and revenue expenditure-01550
This subjective question is related to the book/course
vu fin623 Taxation Management.
It can also be found in
vu fin623 Mid Term Solved Past Paper No. 4.
The best difference can be described as follows :
No business can run without money or resources being invested there in.
Whatever money or resources from ones' own pocket are put in a business is referred to as capital. Capital is the investment of the Owner in the business. This capital or investment must earn a return or profit on its use even if it is coming out of ones' pocket. This return is also known as profit. So no capital should be without a profit or a return. Also, no Capital even if coming from the business owner can be without cost. It is the day to day expenses whose benefit is drawn immediately. For example, salary of the employee, rent of the building.
Revenue Expenditure is the cost of resources consumed or used up in the process of generating revenue,generally referred to as expenses.
