- Spending money or incurring a liability for some benefit, service or property received is called expenditure.
- Purchase of goods, purchase of machinery, purchase of furniture, etc. are examples of expenditure.
- If the benefit of expenditure is exhausted within a year, it is treated as an expense (also called revenue expenditure).
- On the other hand, the benefit of an expenditure lasts for more than a year, it is treated as an asset (also called capital expenditure) such as purchase of machinery, furniture, etc.
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