Revenue and Capital Expenditure: Introduction Video Lecture | Economics for A Level

capital and revenue expenditure by in
this video you should be able to define
the terms capital and revenue
expenditure and also provide examples of
capital and moving your expenditure
let's start by looking what is meant by
the term expenditure expenditure is
money that goes out of the business now
applying that term expenditure and
putting the word revenue in front of it
what we're actually looking at revenue
expenditure its expenditure that is
related to the day to day training of an
organization
this means costs that are occurred
through doing what the business has to
do normally to trade examples will
include the purchase of stock or
inventory as I like to call it paying
your rent paying salaries or wages
paying your rates paying utilities
paying your insurance paying your
telephone bill paying post your
stationery costs paid any bank charges
or interest charges you might have and
paying depreciation if you're not sure
how to count that depreciation or what
is meant by the term depreciation and
check out my peepers be video on
depreciation which explains this concept
and how it's calculated alongside
revenue expenditure we have capital
expenditure now careful expenditure is
expenditure that relates to the purchase
of long term assets or non-current
assets or lots column if you want to
think about couple expenditure in a more
simplistic way it tends to be
expenditure on assets which are
expensive so these are the expensive
assets their business tends to purchase
examples would be land building
machinery equipment vehicles and
fictional fittings now if you notice
I've categorized those as non current
assets and I've also got a term tangible
now tangible means you can touch them
now you think about those assets that
I've listed on that side they're all
assets I could physically touch as a
result that I could physically go and
Stroke my building I can strip my land I
can strip my machine I can strip my
vehicles I buy but they are all examples
of
expenditure large outlays of expenditure
well neither side are still example a
tough expenditure but these are what are
called intangible assets so for example
Goodwill
so there may be goodwill of customers
who will use my business because they
have built up trust and loyalty with me
paintings trademarks or brand loyalty
and brand names I own they've all got a
value if I have to sell them they're all
worth money and they're all a form
capital expenditure if I wants to
purchase one of those now the best way
to test your understanding of this
concept is to actual game so test
yourself on the following capsule or
revenue expenditure a building a
telephone bill wages machinery car and
rent what you should do is check your
answers against this video because all
the answers are in the video at the
start and see how well you understand
the topic of capital and revenue
expenditure thanks for checking out the
B business B YouTube channel don't
forget to subscribe button down below to
subscribe to our YouTube channel don't
forget to follow me on Twitter it's at B
business B also get the Facebook page
alike it's facebook.com forward slash B
business B and lastly don't forget to
check out the online hive activities
found on a bee business pico dot uk'
full of quizzes activities and resources
and remember until next time keep
buzzing