Capital and Revenue Expenditure/ Income — Chapter Summary
ICSE · Class 11 · Accountancy
Summary of Capital and Revenue Expenditure/ Income for ICSE Class 11 Accountancy. Part of the ICSE Class 11 Accountancy syllabus.
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Overview
Capital and revenue items form the basis of correct accounting. Capital items relate to assets, long-term benefit, and the Balance Sheet, while revenue items relate to regular business activity and the Trading and Profit and Loss Account. Correct classification gives true profit and a fair financial
Key Concepts
Capital expenditure is expenditure that results
Capital expenditure is expenditure that results in the acquisition of an asset or an increase in the earning capacity of a business. Its benefit lasts
Revenue expenditure arises out of regular
Revenue expenditure arises out of regular business transactions. Its benefit expires within the year, it is recurring in nature, it cannot be converte
Capital income is income that does
Capital income is income that does not pertain to the normal business operations. Profit on sale of a fixed asset is an example. For example, if a bui
Revenue income arises out of regular
Revenue income arises out of regular business transactions. Profit from the purchase and sale of goods is a common example.
Capital receipts are non
Capital receipts are non-recurring receipts such as capital from proprietors, loans, deposits, sale proceeds of investments, and sale proceeds of fixe
Learning Objectives
- To understand the meaning of capital and revenue items
- To distinguish capital expenditure from revenue expenditure
- To distinguish capital income from revenue income
- To distinguish capital receipts from revenue receipts
- To distinguish capital loss from revenue loss
Frequently Asked Questions
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Sources & Official References
Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.
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