CAPITAL AND REVENUE EXPENDITURE

FINANCIAL ACCOUNTING SSS2 SECOND TERM              

WEEK 5

CAPITAL AND REVENUE EXPENDITURE

Contents

1. Capital Expenditure: Capital expenditures are payments made on items of a capital nature. They are expenses which add to the value of fixed assets. Capital expenditure therefore can simply be described as the expenditure that consists of the cost of fixed assets and other associated costs.

E.g:       (a) Cost of purchase          (b) Cost of delivery

             (c) Installation cost           (d) Legal costs of purchase

             (e) Architect fees.    (f) Cost of demolition before the new building is sited

             (g) Cost of inspection and test of the fixed asset before use.

2. Revenue Expenditure: Revenue expenditures are payments made on running the daily activities of…