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What happens if revenue expenditure is recorded as a capital expenditure?
Wiki User
∙ 12y ago
If that happens, there will be overstatment of the period's profit as well as overstatement of assets. This will reduce the future profit of business because the original costs of assets will be charged more to the Profit and Loss account in process of depreciation of assets.
Wiki User
∙ 12y ago
Wiki User
∙ 12y agothe effects it would has on net profit and net asset is that there would be an increase in net profit and an increase in net asset as well.
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What would happen if you recorded a capital expenditure as a revenue expenditure?
if you recored revenue expediture as capital expediture your profit will be decrease by that amount
What happens when capital expenditure is treated as revenue expenditure?
Expenses are overstated and assets are overstated
What happens when a capital expenditure is treated as a revenue expenditure?
Expenses are overstated and assets are overstated
What happens when a capital expenditure is treated as revenue expenditure?
Expenses are overstated and assets are overstated
What will be paid water charges to the muncipal committee a capital expenditure or revenue expenditure?
revenue expenditurerevenue expenditure
Is leasing a capital expenditure?
If it is finance lease then it is capital expenditure otherwise it s revenue expenditure
What differentiates capital expenditure from revenue expenditure?
Capital expenditure is spending from your savings (eg buying a house), Revenue expenditure is spending from your wages (eg buying a beer).
If a capital expenditure is treated as a revenue expenditure then?
Now, if a capital expenditure is treated as a revenue expenditure, then the expenses would be overstated and also the Fixed assets would be overstated
Why it is important to distinguish capital expenditures from revenue expenditures for tax purpose?
Because it is important. Capital expenditure = non-deductible Revenue expenditure = deductible
The cost of a new windshield wiper on a delivery truck would be classified as a capital expenditure or revenue expenditure or an infrequent expense?
revenue expenditure
Is depreciation revenue expenditure?
Yes depreciation is a revenue expenditure as it incurs every year to generate revenue and capital expenditure is that expenditure which is incurred for one time to earn revenue for more than one fiscal year.
What are the item's of capital expenditure and recurrent expenditure?
Recurrent or Revenue Expenditure are those expenditure the benefits of which are utilized by company in one single year and capital expenditure are those expenditure the benefits of which are utilized for morethan one fiscal year. Revenue expenditure Example: Inventory etc Capital Expenditure : plant, machinery, building etc.
