UNIT 6 FINAL ACCOUNTS AND CLASSIFICATION OF EXPENSES
The expenditure of the firm has been divided into Capital expenditure & Revenue expenditure.
Items of Revenue expenditure are taken in trading account & Profit & Loss account.
Items of Capital expenditure are considered in Balance Sheet
Capital E
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xpenditure is an “Expenditure intended to benefit future periods in contrast to the Revenue expenditure, which benefits the current period”
The transactions of Capital expenditure give benefits for more than one accounting period such as acquisition and improvements of assets.
Capital expenditure is non recurring in nature.
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