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capital and revenue expenditure
What is capital expenditure?
Capital expenditure is spending that results in the acquisition of a fixed asset or an improvement that extends the useful life or capacity of an existing asset, providing benefits over more than one accounting period.
What is the accounting principle that governs the distinction between capital and revenue expenditure?
The accrual and matching principle governs this distinction.
What is revenue expenditure?
Revenue expenditure is spending incurred in the normal course of business operations whose benefit is exhausted within the current accounting period, such as wages, rent, and repairs.
How is capital expenditure recorded in a bank's balance sheet?
It is recorded as an asset and depreciated over its useful life.
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