Commerce Exam > Commerce Videos > Economics Class 12 > Revenue and Capital Expenditure: Introduction
Revenue and Capital Expenditure: Introduction Video Lecture | Economics Class 12 - Commerce
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FAQs on Revenue and Capital Expenditure: Introduction Video Lecture - Economics Class 12 - Commerce
| 1. What is the difference between revenue expenditure and capital expenditure? |  |
Ans. Revenue expenditure is incurred for the day-to-day running of a business, such as salaries, rent, and utility bills. Capital expenditure, on the other hand, is used to acquire or improve long-term assets like machinery or property.
| 2. Why is it important for businesses to distinguish between revenue and capital expenditure? | |
Ans. Distinguishing between revenue and capital expenditure is important for businesses as it helps in determining the true profitability of the company, as well as in making strategic decisions regarding investments and budgeting.
| 3. Can revenue expenditure be treated as a capital expenditure? | |
Ans. No, revenue expenditure cannot be treated as a capital expenditure as they serve different purposes. Revenue expenditure is for day-to-day expenses, while capital expenditure is for acquiring or improving long-term assets.
| 4. How are revenue and capital expenditures recorded in financial statements? | |
Ans. Revenue expenditures are recorded as expenses in the income statement, while capital expenditures are usually recorded as assets in the balance sheet and depreciated over time.
| 5. What are some examples of revenue expenditure and capital expenditure in a business context? | |
Ans. Examples of revenue expenditure include wages, rent, and advertising costs, while examples of capital expenditure include the purchase of new equipment, property, and investments in research and development.
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Dec 22, 2024 Last updated |
Video Description: Revenue and Capital Expenditure: Introduction for Commerce 2024 is part of Economics Class 12 preparation.
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