Can you explain the difference between capital and revenue items of expenditure and income?

Explain the difference between capital and revenue items of income expenditure?

  • please help me... i'm stuck

  • Answer:

    I disagree with Nick's answer. revenue items can be physical, such as stationery, packaging, leaflets, etc. the test of a capital item is one which will have a life of more than one year, eg a car or machinery will normally last for over a year, whereas revenue items like paper and pens will be used within a year.

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Capital items are the physical things you need to operate i.e. a computer which you buy and use for some time, revenue is for things you pay each year such as rent, rates, wages etc.

Nick P

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