A revenue expenditure is a cost that is charged to expense as soon as the cost is incurred by doing so, a business is using the matching principle to link the expense incurred to revenues generated in the same accounting period this yields the most accurate income statement results there are two.
Capital and revenue expenditure expenditure on fixed assets may be classified into capital expenditure and revenue expenditure the distinction between the nature of capital and revenue expenditure is important as only capital expenditure is included in the cost of fixed asset.
A capital expenditure is assumed to be consumed over the useful life of the related fixed asset a revenue expenditure is assumed to be consumed within a very short period of time size a more questionable difference is that capital expenditures tend to involve larger monetary amounts than revenue expenditures.
Capital expenditure machinery is a fixed asset all expenses connected with its import from japan are regarded as a part of its purchase price, so it is capital expenditure repair a/c is debited (xii) revenue expenditure.
Revenue expenditures - definition, explanation, and exaples of capital expenditures a detailed article.
A revenue expenditure is an amount that is expensed immediately—thereby being matched with revenues of the current accounting period routine repairs are revenue expenditures because they are charged directly to an account such as repairs and maintenance expense.