Differentiate between Capital and Revenue Expenditure.
AccountancyClass 11CBSEAnswered 23 Jun 2026
Answer
| Capital Expenditure | Revenue Expenditure |
| The benefit of expenditure extends to more than one accounting period | The benefit of expenditure extends up to one accounting period |
| It increases the earning capacity of business | It is incurred to maintain the earning capacity. |
| It is incurred to acquire fixed assets for operation of business. | It is incurred on day-to-day conduct of business. |
| It is of non-recurring nature | It is of recurring nature. |
| It benefits more than one accounting year | It benefits one accounting year. |
| It is recorded in balance sheet. | It is transferred to trading and profit and loss account |
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