Key Differences Between Capital and Revenue Expenditure

The benefit generated by the revenue expenditure is for the current accounting year. The examples of revenue expenditure is as under – Wages & Salary, Printing & Stationery, Electricity Expenses, Repairs and Maintenance Expenses, Inventory, Postage, Insurance, taxes etc.

Key Differences Between Capital and Revenue Expenditure

1. Capital expenditure generates future economic benefits, but the Revenue expenditure generates benefit for the current year only.
2. The major difference between the two is that, the Capital expenditure is a one time investment of money. On the contrary, revenue expenditure occurs frequently.
3. Capital expenditure is shown in the Balance Sheet, in asset side, and in the Income Statement (depreciation), but Revenue Expenditure is shown only in the Income Statement.
4. Capital Expenditure is capitalized as opposed to Revenue Expenditure which is not capitalized.
5. Capital Expenditure is a long term expenditure. Conversely, Revenue Expenditure is a short term expenditure.