Page 40 - DMGT104_FINANCIAL_ACCOUNTING

Financial Accounting

Notes 2.3.1 Capital and Revenue Expenditures

In business, there are thousands of items of expenditure. The following are some of these
expenditures which are generally incurred in all types of business:
1. Purchase of goods

2. Purchase of fixed assets such as Building, Furniture, Machine, etc.
3. ‘Carriage inwards’
4. Octroi

5. Purchase of Raw Material
6. Import duty
7. Coal, gas, water, oil, grease, fuel, heating and lighting
8. Wages paid to workers for installation of machinery
9. Salaries

10. Rent, rates and taxes
11. Stationery and printing
12. Postage and Telegrams

13. Entertainment
14. Repairs and renewals
15. Depreciation on fixed assets
16. Office expenses
17. Bank charges

18. General expenses
19. Travelling expenses
20. Overhauling of second hand machinery purchased

21. Major repairs affected for reconditioning a machinery/the old assets
22. Increasing the seating capacity of a cinema hall
23. Constructing an additional room
24. Carriage for bringing a fixed asset to place of business
25. Shifting business to convenient premises

26. Advertisement on introducing a new product in market
27. Replacement of hand driven machine by automatic machine
28. Research and development

On the basis of items of expenditure, the expenditure can be classified into three categories:
1. Capital Expenditure,
2. Revenue Expenditure, and
3. Deferred Revenue Expenditure.

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