Accounting for IGCSE & O level - Accounting Procedures (Section 4 - No. 28)
What is the main difference between capital and revenue expenditure?
Capital expenditure is for day-to-day expenses, revenue expenditure is for long-term investments.
Capital expenditure benefits more than one accounting period, revenue expenditure benefits the current period.
Capital expenditure is always paid in cash, while revenue expenditure is on credit.
Capital expenditure increases liabilities, revenue expenditure decreases them.
Explanation
Capital expenditure benefits more than one accounting period. Revenue expenditure only benefits the current period.
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