Question

What is the main difference between revenue expenditure and capital expenditure?

• A. Revenue expenditure is for immediate consumption, while capital expenditure is for future benefits.
• B. Revenue expenditure is taxed, while capital expenditure is not taxed.
• C. Revenue expenditure relates to operational costs, while capital expenditure relates to investments in property.
• D. Revenue expenditure is for recurring expenses, while capital expenditure is for creating long-term assets.

Answer 1

Answer:

D. Revenue expenditure is for recurring expenses, while capital expenditure is for creating long-term assets.

• Revenue expenditure covers day-to-day costs that do not create assets, while capital expenditure is a one-time investment in assets.