What Are The Capital Expenditure And Revenue Expenditure?
The costs which a company incurs in its business operations are known as expenses and the companies can consider them either as a revenue expense or a capital expense. If the expense is recognized in the same accounting period and it is deducted from the income statement then it is known as a revenue expenditure. On the other hand, if the expense is very huge and the expense can be distributed in more than one accounting periods then it is capitalized and it is known as a capital expenditure. In this case, the capitalized expense is entered in the balance sheet and after each accounting period a portion of it is depreciated from the income statement.
