Question: What Are Examples Of Revenue Expenditure?

What is revenue expenditure give example?

Revenue expenditure refers to those expenditures which are incurred during normal business operation by the company, benefit of which will be received in the same period and the example of which includes rent expenses, utility expenses, salary expenses, insurance expenses, commission expenses, manufacturing expenses, ….

Is salary a revenue expenditure?

A revenue expenditure is a cost that is charged to expense as soon as the cost is incurred. … This is all day-to-day expenses needed to operate a business, such as sales salaries, rent, office supplies, and utilities.

Is repair a capital expenditure?

A ‘Capital Expenditure’ is an acquisition or upgrade that permanently increases the value of an asset. … In contrast, any expenditure that serves to restore or maintain, rather than increase, the value of an asset cannot be CapEx — it’s simply repair or maintenance.

What is revenue expenditure give two examples?

Following are the examples of revenue expenditure. Expenditure incurred in the ordinary conduct and administration of business, i.e. rent, , carriage on saleable goods, salaries, wages manufacturing expenses, commission, legal expenses, insurance, advertisement, free samples, postage, printing charges etc.

What is capital and revenue expenditure explain with examples?

Capital expenditures are for fixed assets, which are expected to be productive assets for a long period of time. Revenue expenditures are for costs that are related to specific revenue transactions or operating periods, such as the cost of goods sold or repairs and maintenance expense.

What is a capital expenditure budget why is it important?

A capital expenditure budget is a formal plan that states the amounts and timing of fixed asset purchases by an organization. This budget is part of the annual budget used by a firm, which is intended to organize activities for the upcoming year.

What are the types of revenue expenditure?

There are various types of revenue expenditures.Printer Repair Costs. Most businesses use printers on a daily basis to print reports, customer files, emails and receipts. … Montly Rental Expenses. … Phone and Internet Costs. … Cost for Packaging Supplies. … Upgrading Inventory Software. … Cash Register Repair.

What are 3 examples of expenditure?

Expenditure ExampleS. NoExpenditure TypeExpenditure Classification1Purchase of raw materialsRevenue Expenditure – Direct2Electricity billsRevenue Expenditure – indirect3Advertising expensesRevenue Expenditure – indirect4Direct labor costsRevenue Expenditure – Direct6 more rows

What are the 4 types of expenses?

Terms in this set (4)Variable expenses. Expenses that vary from month to month (electriticy, gas, groceries, clothing).Fixed expenses. Expenses that remain the same from month to month(rent, cable bill, car payment)Intermittent expenses. … Discretionary (non-essential) expenses.

What is an example of capital expenditure?

Capital expenditures are a long-term investment, meaning the assets purchased have a useful life of one year or more. Types of capital expenditures can include purchases of property, equipment, land, computers, furniture, and software.

What do you mean by capital expenditure?

Capital expenditure is the money spent by the government on the development of machinery, equipment, building, health facilities, education, etc. It also includes the expenditure incurred on acquiring fixed assets like land and investment by the government that gives profits or dividend in future.

Is salary a capital expenditure?

Key Takeaways. Capital expenditures (CAPEX) are a company’s major, long-term expenses, while operating expenses (OPEX) are a company’s day-to-day expenses. … Examples of OPEX include employee salaries, rent, utilities, property taxes, and cost of goods sold (COGS).

What is the main characteristics of revenue expenditure?

Revenue expenditure is the expense happens due to normal business operation and it provides benefit in the same accounting period. The company needs to spend on these expenses in order to run the operation and generate revenue. These expenses will provide the benefit to the company in the current period only.

What are 2 types of expenses?

Two Types of Business ExpensesOperating expenses: Expenses related to the company’s main activities, such as the cost of goods sold, administrative fees, and rent.Non-operating expenses: Expenses not directly related to the business’ core operations.

What are examples of expenditure?

Expenditure – This is the total purchase price of a good or service. For example, a company buys a $10 million piece of equipment that it estimates to have a useful life of 5 years. This would be classified as a $10 million capital expenditure.