Chapter 7, Problem 11DQ

To determine

Revenue Expenditure:

The expenditure which does not provide any increment in the benefit after it is incurred in the future to the company is known as revenue expenditure. It is to be recognized as an expense when it is incurred in the books as per the matching concept.

Capital Expenditure:

The expenditure which provides increment in the benefit after it is incurred in the future to the company is known as capital expenditure. It is to be capitalized and expensed over the time of providing benefit by such expenditure as per the matching concept.

The concept that should be considered when evaluating the accounting for expense made for assets.