What Is The Distinction Between Revenue And Capital Expenditures?
Revenue is money coming into a company. The closest thing to revenue expenditures will be various expenses such as cost of goods sold, selling and administration expenses, etc… These expenses are normally recognized immediately. Capital expenditures are purchases of fixed assets such as land, buildings, and equipment. These purchases are not considered expenses until the item (except land) is depreciated over its lifetime. This breaks the expense into portions that are distributed among the useful life of the asset instead of expensing the asset when it is purchased.
