Expenditures Essay

An easy way I determine the difference between these two is this simple act, revenue expenditure is about maintenance and essentially upkeep, things such as paying for oil changes and gasoline for company vehicles are all good example of a revenue expenditure. Another good way to determine a revenue expenditure is if it is paid right away or not versus being paid over the course of a set period of time.

Capital Expenditures are more about improvements on existing properties or assets, for example paying for a renovation of a store property would be considered a capital expense. Some other examples of a capital expense can be the upgrading of a corporations information technology systems, as that is an improvement upon an already existing asset. The payment of capital expenditures tend to be over the course of time instead of revenue expenditures, it is common for a capital expenditure to paid off over the course of several months and in some cases even years.

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Some will say that capital expenditures are identified by the fact that these expenditures are for the sake of increasing and improving on business, but I ay that is not exclusive to capital expenditures because that can also be found with revenue expenditures; therefore this cannot be factual. When it comes to a company or corporation or business no matter the size of it, it will be spending money more than often on itself for the sake of growing as a business. This is called profitability, which is how good a business is at using its income to grow as a business so it will be able to bring in more income.