Examples of Revenue Expenditure and Capital Expenditures



Following are the examples of revenue expenditure.
  1. Wages or salaries paid to factory workers.
  2. Machine Oil to lubricate.
  3. Electricity or Power required to run machinery or motor.
  4. Expenditure incurred in the ordinary conduct and administration of business, i.e. rent, , carriage on saleable goods, salaries, wages manufacturing expenses, commission, legal expenses, insurance, advertisement, free samples, postage, printing charges etc.
  5. Repair and maintenance expenses incurred on fixed assets.
  6. Cost of saleable goods.
  7. Depreciation of fixed assets used in the business.
  8. Interest on borrowed money.
  9. Freight, cartage, octroi duty, transportation, insurance paid on saleable goods.
  10. Petrol or diesel consumed in motor vehicles.
  11. Service charges to motor vehicles.
  12. Bad debts. 

The following are the capital expenditures Examples:
  • Cost of goodwill.
  • Cost of freehold land and building and the legal charges incurred in this connection.
  • Cost of lease.
  • Cost of machinery, plants, tools, fixtures, etc.
  • Cost of trade marks, patents, copy rights, designs, etc.
  • Cost of car, lorry etc.
  • Cost of installation of lights and fans.
  • Cost of any other assets acquired by way of equipment.
  • Erection cost of plant and machinery.
  • Cost of addition to existing assets.
  • Structural improvements and alteration in the existing assets.
  • Expenses for developments in case of mines and plantations.
  • Expenses for administration incurred during construction and equipment of any industrial enterprise.
  • Expenses incurred in experimenting which finally result in the acquisition of a patent or other rights.

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Difference Between Capital and Revenue Expenditure



The difference between capital expenditures and revenue results in terms of capital expenditures, in addition to the assets in the account, while the results of expenditure and income, as well as the expense account. Payments for capital expenditures to make adjustments to assets and additions and substitutions are income benefits expenses in the current period and to maintain the assets in routine repairs or lower replacement part. There are capital expenditures for the benefit of two or more periods accounting through the process of consumption and expenditure for future years. A capital expenditure also recorded revenue expenditure caused an understatement of net income in that year. Once loaded the item, it goes to the expense side of the income statement capitalizing time and item will be processed on the balance sheet.

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Accounting for Management - Accounting theme from Business Law.