Capital and Revenue Expenditure Assignment Help
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Accounting Treatment for Revenue and Capital Expenditure
The expenditure incurred or to be incurred on fixed assets can be categorized into capital and revenue expenditure. When it comes to showing the actual treatment of capital and revenue expenditure in accounts most students get confused. Therefore, a clear distinction between the two needs to be made and this can be best explained by the professionals of BookMyEssay.
- Treatment of Capital Expenditure: This is the cost incurred for acquisition of fixed assets and other expenditure that will increase the earning capacity of the same. While dealing with Capital and Revenue Expenditure assignment help you will be able to understand that the expenditure is not only inclusive of the cost of purchase but also the additional cost required to bring the asset into working condition. In accounting treatment, the asset account is debited for the asset purchased and the capital receipts earned from the sale of such asset is credited to the asset account.
- Treatment of Revenue Expenditure: This is the expenditure that is incurred on fixed assets as maintenance and operating expense including those that would increase its earning capacity. Such costs are recurring and the benefits derived from its use are reflected over a period of time. The revenue expenses are considered as a part of the activity of the business such as payment of wages to workers, salaries to employees, rent, insurance etc. and the revenue receipts are considered as receipts from business activities.
Need for Taking Help for Assignment Work
There are several factors influencing both the Capital and Revenue Expenditure of a business. The factors influencing Capital expenditure are as follows-
- Purchase Cost
- Delivery Cost
- Installation Cost
- Legal charge
- Upgradation Cost
- Replacement Cost
On the other hand, the factors which influence the Revenue expenditure are mentioned below-
- Maintenance Charge
- Repair Cost
- Renewal expense
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