Capital vs
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Questions and Answers

Which type of expenditure is a long-term investment that provides future benefits?

  • Financial Expenditure
  • Revenue Expenditure
  • Operating Expenditure
  • Capital Expenditure (correct)

    • What is an example of Capital Expenditure?

  • Renovating an existing building
  • Purchasing a new building (correct)
  • Paying rent for an existing building
  • Buying office supplies

    • What distinguishes Revenue Expenditure from Capital Expenditure?

  • Expense for expanding business operations
  • Short-term expense for daily operations (correct)
  • Long-term investment for future benefits
  • One-time payment for a major asset

    • Which type of expenditure results in the formation of new assets for the company?

    <p>Capital Expenditure</p> Signup and view all the answers

    What do Revenue Receipts add to the company?

    <p>No long-term value</p> Signup and view all the answers

    Which type of expenditure is a short-term expense necessary for daily operations?

    <p>Revenue Expenditure</p> Signup and view all the answers

    What do Capital Receipts do to the net worth of the business?

    <p>Increase it</p> Signup and view all the answers

    What do revenue receipts create for the company?

    <p>No liabilities and no claim on the government</p> Signup and view all the answers

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