Sir John you said that capital expenditure is the money spent on buying non-current assets and revenue expenditure is the expenses incurred to earn revenue.
My question is that:
1. Non-current assets on SOFP are all capital expenditure for the business?
2. Operating expenses on SOPL are all revenue expenditure for the business like rent expense, interest expense, telephone expense etc?
Ask the Tutor ACCA FA
capital n revenue expenses
3y ago#1Again, yes to both.
Are you watching all of my free lectures (in chapter order)?
Sorry to ask again but you stated in lecture that revenue expenditure is the running cost of the machine because it is the machines that earn revenues.
1. Capital expenditure is the cost of puchasing the non-current assets like PPE, machines, building etc.
I have two questions regarding revenue expenditure:
2. Revenue expenditure is the cost of all the operating expenses related to the NCAs only like maintenance & repair costs, lubrication cost, electricity cost etc.
3. Revenue expenditure is the cost of all the operating expenses of the company like Telephone cost, Factory rent expense, Bad debt and Interest expense etc.
What I have written is correct?
3y ago#3Yes, what you have written is correct.
Sign in to reply to this topic.