Question

What is meant by budget of the government? Given two differences between revenue expenditure and capital expenditure.

Answer 1

Budget is a statement of expected receipts and expenditure of the government over the period of a financial year.

Differences between revenue expenditure and capital expenditure:-

1.Revenue expenditure is that expenditure by the government which does not cause increase in government assets and which does not cause any reduction in government liability.

2.Capital expenditure is that expenditure by the government which causes increase in government assets and which causes any reduction in government liability.