1. Capital expenditure increases an asset’s capacity or useful

| June 10, 2016

Question
1. Capital expenditure increases an asset’s capacity or useful life. On the other hand, revenue expenditures help in maintaining an asset or restoring it to working condition.

Consider the features of capital and revenue expenditure and respond to the following:

List six points of difference between capital and revenue expenditure.
Why is it necessary to distinguish between capital and revenue expenditure while preparing accounts?

2. Intangible assets have no physical form. Patents, copyrights, goodwill, trademarks are some examples of intangible assets.

Consider the features of intangible assets and respond to the following:
Discuss the problems you may face while accounting for intangibles.

Include APA citations for each answer.

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