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State any four points of distinction between Capital and Revenue Expenditure.

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Following points of distinction between capital expenditure and revenue expenditure : 

(a) Capital expenditure increases earning capacity of business whereas revenue expenditure is incurred to maintain the earning capacity. 

(b) Capital expenditure is incurred to acquire fixed assets for operation of business whereas revenue expenditure is incurred on day-to-day conduct of business. 

(c) Revenue expenditure is generally recurring expenditure and capital expenditure is non-recurring by nature. 

(d) Capital expenditure benefits more than one accounting year whereas revenue expenditure normally benefits one accounting year.

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