This can be a payment is cash or can also be the exchange of some valuable item in exchange for goods or services. endobj Unlike capital expenditures, these are not carried forward to future years. The benefits of revenue expenditures usually expire within one financial year and their budget is smaller as compared to capital expenditures. Welcome to “Capital and Revenue Expenditure and Receipts” topic. Weaknesses in revenue and expenditure management could constrain the ability of a municipality to contribute to poverty reduction and economic development. Capital Expenditure and Revenue Expenditure both are important for business for earning a profit in the present as well as in subsequent years. Deferred Revenue expenditure 7. Please click here to … Capital Income and Expenditure, Revenue Income and Expenditure and Deferred Revenue Expensiture Finance professionals can use this entirely editable deck to discuss how CapEx enhances the scope of operations for the business and generates revenue for many years by boosting operational efficiency. Before we explore this part of accounting study material at Accounting-Daddy.com, let’s examine what Cambridge wants us to learn under this title at secondary education level: A capital expenditure is an amount spent to acquire or significantly improve the capacity or capabilities of a long-term asset such as equipment or buildings. Expenditure means spending on something. Activity slide could be used as a Plenary!!! Notifications 5. Capital and Revenue expenditure. Ik$lu1�h6 ������\�� $�+�"(/�a���3�+�B��+�Һ��{��B ��-[W�u��+LM�NDS�_iQ�ODÇ��ݓ�D�Π1� ;�n�8�����(g?`�h��@s`��?s�}� &��� IDEAL / CPT / ACCOUNTS / CAPITAL & REVENUE EXPENDITURE 51 Capital and Revenue Expenditure Capital Revenue 1) Long Term benefit Short Term benefit (Maximum 12 months) 2) Non-recurring or One time expenditure. Revenue Expenditure Treated as Capital Expenditure. Report a problem. ��S��(r�T��7Q�E'. 3 Capital and Revenue.pptx from FINANCIAL ACCT6003 at Parul Institute of Engineering and Technology. Capital expenditure is when fixed assets are bought into the company, these are called capital items. Remember Multiple choice questions are having good weightage in the total marks of … This is so because repair and maintenance costs do not increase the earning capacity of the machine but only maintains it (i.e. In the case of a capital expenditure an asset has been purchased by the company which generates revenue for upcoming years. Following are the list of important revenue expenditures, but under certain circumstances, they are treated as a capital expenditure − Raw Material and Consumables − If those are used in making any fixed assets. 7 Capital Expenditure and Revenue Expenditure Reference: Chapter 20 (p.221) 21 (p. 258) A Reasons to distinguish ... – A free PowerPoint PPT presentation (displayed as a Flash slide show) on PowerShow.com - id: 6c2a9d-MGE0M Preview and details Files included (1) ppt, 122 KB. 2. �a�� /�a''|�|�g�{�"�_�e��� Capital and Revenue Expenditure and Receipts. It is the process of causing a liability by a commodity. Search Skip to Content. SlideTeam added 396 new products and 5544 new slides in the past 24 hours. -- Created using PowToon -- Free sign up at http://www.powtoon.com/youtube/ -- Create animated videos and animated presentations for free. Usually the cost is recorded in a balance sheet account that is reported under the heading of Property, Plant and Equipment. Syed alfaz . ���vdZe#���ۣ���cJ� �.���)�\�sঔ4B�)t��鷰!��c(.��"��6T��)>}�����2������Eea3��F/h�')�s��PS�Q� .Zk��.b����. Both have its own merits and demerits. Business expenditures are accounted for in either one of the two ways. They are also likely to reflect the existence of other governance challenges. Capital and revenue items. 3 Expenditure The use of goods and services in order to earn revenue is the expense. 3) Recorded in balance sheet Recording in Manufacturing, Trading or Profit and Loss A/c <> 0 It’s not enough to say that capital expenditures are everything that revenue expenditures aren’t. Multiple choice questions (MCQs) Chhavi sharma . Thank you . Search. They are either expensed in the income statement (revenue expenditures) or capitalized as fixed assets in the balance sheet (capital expenditures). Reply. %PDF-1.5 View Chapter no. Capital and Revenue Income and Expenditure - Free download as Powerpoint Presentation (.ppt / .pptx), PDF File (.pdf), Text File (.txt) or view presentation slides online. Practice following Capital and Revenue Expenditure Multiple choice questions. Capital receipt 4. What is a capital expenditure versus a revenue expenditure? You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments.. capital and revenue 1.1 topic 1. capital and revenue expenditures and receipts Again, sometimes accountants may show revenue expenses as capital expenses for overstating the profit and getting incentives. You can use this creatively designed set to explain how capital expenses differ from operating … Distinguishing between capital and revenue expenditure Author(s): Mark POOLE Materials from this session: insert_chart Free. Capital expenditures vs. revenue expenditures. 1 0 obj Other transactions are of capital nature. Created: Jan 5, 2011. ppt, 122 KB. Distinguish between capital and revenue expenditure 2. Plus, capital expenditures will show up differently on your reporting metrics. The benefit of the revenue expenditures is received in the same accounting year itself. If you continue browsing the site, you agree to the use of cookies on this website. 3 0 obj Hendriksen opines, "expenses are the using or consuming of goods and services in the process of obtaining revenues". �#r�!��'���}�μte�W����h����=������'��| I think it is better to go through this MCQ’s. 1938 0 obj <>/Filter/FlateDecode/ID[<42AEEECF1D2AB244B013BE42CDAE9F5A><5CD56B4593AD8B4396DB3781BEA8EC08>]/Index[1932 15]/Info 1931 0 R/Length 52/Prev 1058069/Root 1933 0 R/Size 1947/Type/XRef/W[1 2 1]>>stream 1946 0 obj <>stream x��Z[o�~7����bd�"))(ě�H��胷㙱��z�hf�����)�I봏�a["y���E�7�_}�������B�~��F��s#n�./r��ryq��?�͏�������*p0�UVV�����n//���ؿy�5����xR��J�:��GZ��J(T!�2� R,��d_���JmdE����4։W��n�-�b�-������VdŢ#K�4C^��ei�r��(/f�Rc���N�x�g����2�HU��qF�fK��ff��Ç� �X,�w�R/>>S�����^(�_�U�r�j^�Q_�Z��{�w䯀�Q�AF���ْ����'����=�w��v�ϖ�b�O-[j��dž*j\� �Fw܀zݠǞ�?���5-�U�����j�8�X�x� Back to: Capital and revenue items (quizzes) Show your love for us by sharing our contents. Capital expenditure constitutes those expenses that are typically incurred while acquiring capital assets or upgrading the current ones. Search. Capital and Revenue Expenditure. Capital expenditure 6. Deferred Revenue expenditure . The benefits of capital expenditures are enjoyed by the company for more than one financial year and their budget is usually larger than the budget set for revenue expenditures. Revenue expenditure refers to expenses incurred in the day to day running of the business. Info. endobj 3. 4 0 obj These are recurring in nature and are allocated to the profit and loss account of the same year. ��~�{h�-�o��r�� �B��j6�]��o�6tLy��T�B��ϰ�g�%S��=����9�de`�$0Q�y�@U�ъ�$6� �2H����"��j� �~��(RQd��'��wfZ��*O��(KK�7m�������q߅78�u�����31�����)t|�0��o��O_ӗ�R���_d�"3�"s͸�}b^X޼loڇ�Ȍ�|�g��>&0���XdGJ endstream endobj 1933 0 obj <>/Metadata 256 0 R/Pages 1930 0 R/StructTreeRoot 303 0 R/Type/Catalog/ViewerPreferences 1940 0 R>> endobj 1934 0 obj <>/MediaBox[0 0 595.32 841.92]/Parent 1930 0 R/Resources<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/Tabs/S/Type/Page>> endobj 1935 0 obj <>stream Capital Expenditure found in: Capital Expenditure Details Ppt Show, Capital Expenditure Details Ppt Outline, Capital Expenditure Details Ppt Topics, BMW Group Capital Expenditure 2014-18, Capital Expenditure Powerpoint.. Toggle Nav. Revenue expenditure is money being spend on items used on a regular basis such as buying stock to sell or paying staff payslips. hތR;KA����O%h�$���� On the other hand, no asset is acquired as such in the case of a Revenue Expenditure. %PDF-1.7 %���� Revenue expenditure 3. The revenues and expenditures of municipalities determine their ability to deliver services. An expense is a word very similar to expenditure but expense shows the deduction in the value of the asset while expenditure simply denotes the obtaining of as… <> It refers to the distinction of capital from revenue expenditure for tax purposes. ‘Capital v Revenue expenditure’ is a term used throughout this toolkit. Capital Expenditure found in: Capital Expenditure Details Ppt PowerPoint Presentation Infographics Guide, Capital Expenditure Details Fy 18 Ppt PowerPoint Presentation Summary Themes, Capital Expenditure Valuation Methods Ppt.. <>/XObject<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S>> %���� Duration: Revenue expenditure is made during the short-term. a quick aid to distinguish between capital and revenue expenditure, simple activity included. A D V E R T I S E M E N T. 4 Comments on . About this resource. %%EOF 2 0 obj Capital expenditure 8. Capital expenditure 5. Difference between Revenue Expenditure and Capital Expenditure. If you are new to accounting, the difference between capital expenditures and revenue expenditures can seem a bit confusing. endobj These expenditures are generally for the purchase of fixed assets or assets with a long life. On the other hand, when capital expenditure … When an accountant consider revenue expenditure as capital expenditure, it will overstate the profit of the company and non-identifiable fixed assets will arise. Revenue expenditure • Day-to-day running of business. upgrading/maintaining the long-term assets with our Capital Expenditure (CapEx) PowerPoint template. Capital and Revenue expenditure. Capital expenditure • Buy fixed assets or • Add to the value of an existing fixed asset. endstream endobj startxref Read more. <> stream The Concept of Capital and Revenue Expenditure: Expenses, losses, and incomes are also known as revenue items since they together will show up the net profit or revenue earned. Capital expenditures are usually one off and they include the substantial investments of money or capital that a government makes for the purpose of expansion in various sectors and different business in order to generate profits. Capital Expenditures Team 6 Managerial Accounting Nov. 2, 2006 Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Revenue Expenditure: Capital Expenditure: Definition: The expenses a firm incurs each day to maintain its daily business activities are revenue expenditure. Capital & Revenue expendituRe. hެTMO1�+>����-�H���J�*�JU��7��l�]���w�� *ꡇj���7�q���k���ft�k(f�A��U J�� �'(�6r�����vڈ6�hrB�@ XXY�X������Nq����7;� }M�Ci�!9>��29B�k�����!�Me��������j鱘..�K��V�|����fO��ۓ�F�����j��kwZ�;m� ���&K Reply. UNIT 1 CHAPTER 3 CAPITAL AND REVENUE EXPENDITURE CAPITAL EXPENDITURE: CAPITAL They break down differently, depending on the size of the payment and the time across which it needs to be paid for. Loading... Save for later. business expense that is made to acquire an asset or to improve the capacity of an asset After completing this chapter, you should be able to : 1. Capital expenditures; Revenue expenditures; Capital expenditures Definition and explanation of capital expenditures: An expenditure is a capital expenditure if the benefit of the expenditure extends to several trading years. h�bbd``b`�$W�+w�`� ߶201�KY�����\~ �G� Definition of Capital Expenditure. Capital expenditures (CAPEX) are … Ramamohan . 5. ;�=��l�q�ni���9����U�Z9� S���� �]�X9��7[�>���lʯ b�6�W�j��eQ�',jp�:`w��7�1��C?�0��{zp�0��W�P��T�)�t��Q��4j����FC��LO�Q�� صk^���� � �v��~nf?_��?�й�Y'U�O�������7� �3v*�ZWc���y�$)�4 ���|�r> �5�G���u2b��BArC٪m��sU����O��V�WX�p|G�g��]� Nice. Most of the accountants often confuse regarding capital and revenue expenditure, particular who come from non-accounting back ground. It can be categorised as capital expenditure or revenue expenditure. 1932 0 obj <> endobj Whereas the initial purchase and installation costs would be classified as capital expenditure, any subsequent repair and maintenance charges incurred in the future will be classified as revenue expenditure. One must be clear in one’s mind regarding the nature of an item of expenditure. Recurring or Regular expenditure. Describe the effect on final accounts, mainly on net profit, if revenue expenditure is wrongly treated as capital expenditure and vice versa. Cartage and Freight − If those are incurred to bring Fixed Assets. Receipts and invoices keep the records of expenditures. O�Z#/�lN�#�#���P��1+�FR��١q��w۠/)GZ!��!s������mUʢ��&���tu��Q4�r0K�A��,��#�aB�qB�-���B*}�? The differences between capital expenditures and revenue expenditures include whether the purchases will be used over the long-term or short-term. 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And Payments t I s E M E N T. 4 Comments on their ability to deliver.... Throughout this toolkit expenses that are typically incurred while acquiring capital assets or • Add to the value of existing! Term used throughout this toolkit Created: Jan 5, 2011. ppt, KB... Regular basis such as buying stock to sell or paying staff payslips not. Engineering and Technology accountants may show revenue expenses as capital expenditure is when fixed or... New to accounting, the difference between capital expenditures as capital expenditure or revenue expenditure refers expenses... Their budget is smaller as compared to capital expenditures and revenue expenditures expire... … capital and revenue expenditures is received in the case of a expenditure! The purchase of fixed assets or assets with a long life effect on final accounts mainly., mainly on net profit, if revenue expenditure, particular who come from non-accounting back.. To deliver services capital items who come from non-accounting back ground expense that made. Animated videos and animated presentations for Free they break down differently, depending on the size the. Details Files included ( 1 ) ppt, 122 KB repair and costs... Municipalities determine their ability to deliver services 5, 2011. ppt, 122 KB financial ACCT6003 Parul!