We didn’t include “Loss” as the 4th reason/item in the Increase in Net Asset equation because “that is simply negative profit”. Then why did we include “Drawings” in the said equation? Aren’t drawings “negative capital introduced” too?
Hello John, thanks for the lectures. You say a capital expenditure is when we purchase a non-current asset. Is it also a capital expenditure when we purchase inventory (which is a current asset)?
Hello professor, a question if you don’t mind.
We didn’t include “Loss” as the 4th reason/item in the Increase in Net Asset equation because “that is simply negative profit”. Then why did we include “Drawings” in the said equation? Aren’t drawings “negative capital introduced” too?
Drawings have to be shown separately in the Statement of Financial Position.
That makes sense. Thank you for responding!
You are welcome 🙂
Is asset expenditure the same as capital expenditure?
It is capital expenditure if they are buying non-current assets.
Hello John, thanks for the lectures. You say a capital expenditure is when we purchase a non-current asset. Is it also a capital expenditure when we purchase inventory (which is a current asset)?
No – that is revenue expenditure (when we buy it, it is purchases. Inventory is what is left of the purchases at the end of the period).
thank you so much and it is very clear in explanation
Thank you for your comment 🙂
Your explanations are very clear and easy to understand, Thank you for your service….
Thank you for your comment
Hello, Sir!
Thanks for the lesson!
Could you please tell me, is the revenue expenditure the same as OPEX (operating expenses)?
Yes – operating expenses are revenue expenditure.
I am learning a lot.Its clear and precise.Thank you Sir
Thank you for your comment 🙂
I am learning a lot.Its clear and precise.
Thank you, SIR. I don’t understand how you come about the $4,000 as the final answer Sir.
Great lessons so far very clear even though I already knew it you have made it clearer thank you.
You are welcome 🙂
Your explanations are so clear and concise. Thank you so much for such an excellent and helpful learning platform.
Thank you for your comment 🙂