Professional Documents
Culture Documents
Expenditure
The
most
important
factor
affecting the classification is the
nature of business.
Need to classify expenses into
capital and revenue
1. To adhere to Matching Principle
2. To enable a true and fair view of
financial statements
3. To show correct financial results
Examples
1.Repairs of furniture
2.Painting of building
3.Purchase of stationery
4.Salaries
YES
Capital Expenditure
Debit Plant Assets
accounts
NO
Revenue Expenditure
Debit Repairs and
Maintenance account
Activity
On your book write on one
side
REVENUE expenditure
And on the other
CAPITAL expenditure
Marketing
expenditure
Revenue
Expenditure
Ink cartridges
Revenue
Expenditure
Inventories
Revenue
Expenditure
Office Equipment
Capital
Expenditure
Salaries
Revenue
Expenditure
New factory
Capital
Expenditure