Question

Distinguish between revenue expenditure and capital expenditure.

Answer 1

$\begin{array}{ccc}\text{S.No}& \text{Revenue Expenditure}& \text{Capital Expenditure}\\ 1.& \text{It neither creates any assets}& \text{It either creates an asset}\\ & \text{nor reduces liability.}& \text{or reduces liability.}\\ 2.& \text{It is incurred for normal conduction of}& \text{It is incurred mainly for acquiring}\\ & \text{government departments and various}& \text{assets and granting loans.}\\ & \text{services.}& \\ 3.& \text{It is recurring in nature.}& \text{It is non-recurring in nature}\\ 4.& \text{Examples - salary, pension, interest etc.}& \text{Examples-repayment of loan,}\\ & & \text{acquisition of asset etc.}\end{array}$