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Businesses benefit from such type of expenditure over a long period of time. For example, a delivery vehicle can be used for over 5 years to deliver goods to customers. Computers may easily be used for 3 or 4 years. A building may be used for over 20 years.
For the above reasons, capital expenditure are entered as non-current assets in the balance sheet. The cost of non-current assets is charged against profit over the years the assets can used and benefits derived. Such process is called "provision for depreciation".
What else can I help you with?
Deferred revenue expenditure?
Deferred expenditure refers to expenses incurred which do not apply to the current accounting period. Instead, they are debited to a 'Deferred expenditure' account in the non-current assets area of your chart of accounts. When they become current, they can then be transferred to the profit and loss account as normal.
It is an acceptable accounting practice to treat an expenditure that is not material in dollar amount as an expense of the current period even though the expenditure may benefit several periods?
True
Is credit income or expenditure?
Credit is neither an income or an expenditure. It becomes an expenditure when you use it. expenditure
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.
Is leasing a capital expenditure?
If it is finance lease then it is capital expenditure otherwise it s revenue expenditure
Deferred revenue expenditure?
Deferred expenditure refers to expenses incurred which do not apply to the current accounting period. Instead, they are debited to a 'Deferred expenditure' account in the non-current assets area of your chart of accounts. When they become current, they can then be transferred to the profit and loss account as normal.
What are the principles of comparative and absolute advantage and their relevance in the development of third world countries?
what is the difference between capital and current expenditure what is the difference between capital and current expenditure
It is an acceptable accounting practice to treat an expenditure that is not material in dollar amount as an expense of the current period even though the expenditure may benefit several periods?
True
Why current account deficit is good for US?
The current account deficit is good for the United States because it helps them regulate their expenditure.
What type of expenditures is included in the cost base of a non- current assets?
cap[ital expenditure
What is planned savings?
Planned savings is the money you plan to save alongside your current expenditure . For example if your total expenditure of the week is going to be £15 and you have £20, your planned saving could be to save £5 as you have that left over.
Is credit income or expenditure?
Credit is neither an income or an expenditure. It becomes an expenditure when you use it. expenditure
What is the definition of Recurring Expenditure and Non Recurring Expenditure?
expenditure
What do you mean by revenue expenditure?
Expenditure for which benefit is expected to be taken in one fiscal year from occurance of expenditure is called 'Revenue Expenditure" Expenditure for which benefit is expected to be taken for morethan once year is called 'Capital Expenditure'
Where to hyphenate expenditure?
Expenditure is not hyphenated.
What is irregular expenditure?
what is irregular expenditure
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.
