Header Ads Widget

what is revenue, expense & drawing in accounting? [examples]

 What is revenue, expense & drawing in accounting? [examples] 

What is Revenue Expenditure? | ACCOUNTING

A company will have different types of expenditure, how will revenue expenditure be treated in the accounts?

what is revenue expenditure?

Usually, a business will have cash coming in, which is can be known as income, and cash going out which can be referred to as expenditure.

Expenditure can be defined as a payment or agreement to make a payment which in return a benefit, asset, or service will be received. Business expenditure can range anything from the purchase of office furniture to paying the petrol bill to refill a van.

As there is such a mixture of expenditures, it may be beneficial for a business to categorize them into particular groups as these will possibly be treated differently in the accounts. In the accounting world, there is the idea that is adopted in the practice of categorizing expenditure into two main categories.

The main difference between revenue expenditure and capital expenditure can be demonstrated with the total cost of operating a motor vehicle. Initially acquiring the motor vehicle for the business is an example of capital expenditure. This is because the vehicle will be in the business for use for at least a few years and therefore is a fixed asset.

On the other hand, paying for petrol to use in the motor vehicle will be a revenue expenditure. This is mainly because the petrol or expenditure will be used up in a short time and does not add long-term value to the fixed asset.

Additionally, it is fundamental that there is a correct distinction between capital and revenue expenditure as this is essential to determine a correct value for the profit and assets of a business.

Expenses Definition - What are Expenses? | ACCOUNTING

Expenses definition with a discussion of key components in the definition and examples to illustrate the term if expenses. The definition of expenses: Outflows or using up of assets as part of operations of a business to generate sales/revenue. Expenses are what the business consumes in order to achieve the goal of generating revenue.

Define the term of expenses according to fundamental accounting principles while 22nd edition the definition of expenses arm outflows or using up of assets as part of operations of a business to generate revenue or sales.

key terms here being that we are looking at our goal of the business the goal generally to be revenue or sales that are the objective expenses are us using up the assets in order to help us achieve that goal.

we usually have some idea of what expenses are if we were to ask someone what expenses are probably would hear a list of expenses as an answer but when we actually record expenses we often get confused in terms of what's an expense what's an acid if we purchase something.

if we consume our cash through expending it and receive something is that thing we receive that expense or is it an asset the point in time that we consume that expense that assets and consume it that's when it turns to an expense for example if we look at some common expenses we can look at a phone.

if we think about a phone the phone itself might be an asset because it's gonna help generate revenue in the future the phone bill represents the step that we have used the consumption of the use of the phone that's what it's going to be an expense because we consume that portion of it.

Meaning Of Expenses In Accounting | ACCOUNTING

Expenses in accounting are often considered that the term expenses and expenditure mean the same but in accounting, these two terms have separate meanings the term expenditure is broader term expenses are a part of the expenditure.

Basically, expenditure is of three types

  • capital expenditure
  • revenue expenditure
  • deferred revenue expenditure 

we will go into detail about the meaning of the term expenditure here we are just trying to understand how are expenses different from the expenditure.

so the expense is a part of the revenue expenditure therefore we can say that revenue expenditure includes expenses are the cost incurred for generating revenue.

Revenue and Capital Expenditure | CA CPT

you will learn and study about Revenue and Capital Expenditure deferred revenue expenditure, etc. This video is helpful in CA CPT Examination.

Every business has cash inflows and cash outflows inflows come from the sale of its goods or services or by taking a loan of flows of payments for various things light stationery computers equipment or land.

This income and expenditure can be revenue or capital in nature hence it is very important to understand the nature of the transaction so that accounts can be classified and maintained correctly as per applicable routes, expenditure can be classified according to their nature.

  • we have capital expenditure.
  • revenue expenditure.
  • deferred revenue.

Revenue meaning, definition & pronunciation | What is Revenue? | How to say Revenue

Definition of the word revenue noun the income returned by an investment.

The total income received from a given source. all income generated for some political entities treasury by taxation and other means.

the total sales turnover the net income from normal business operations net sales a return something paid back revenue.

Capital and Revenue Expenditure | ACCOUNTING

I look at the topic of Capital and Revenue Expenditure. 

This video explains the terms capital and revenue expenditure and then looks at different examples of capital and revenue expenditure for an organization. At the end of the video, there is a short quiz enabling you to test your level of knowledge and understanding of this topic.

capital and revenue expenditure by In this video you should be able to define the terms capital and revenue expenditure and also provide examples of capital and moving your expenditure.

let's start by looking at what is meant by the term expenditure is money that goes out of the business now applying that term expenditure and putting the word revenue in front of it what we're actually looking at revenue expenditure its expenditure that is related to the day to day training of an organization.

This means costs that are occurred through doing what the business has to do normally trade.

FAQs Related Questions & Answers :)

Introduction to Accounting. | What is accounting?
Accounting is a useful way of recording and summarizing financial information. Businesses use accounting to keep their financial information organized which helps them in making sense of their financial data and also keeps them compliant with financial regulations. Learn More.

A House An Asset Or A Liability? [ Finally Explained ]
Is a house an asset or a liability? That is one of the biggest questions many people have when they think about buying a house.
It is important to understand real estate in terms of assets and liabilities and the different ways you can buy a house so you will no longer wonder Should I buy a house? Learn more.

What is The Accounting Equation?
It is a basic but also a very important accounting principle, so what is the accounting equation? LEARN MORE.
so what is the accounting equation? I’m Thomas Harwood and Welcome to The Accounting Student, where we create free and short videos Learn more.

What is Revenue Expenditure? | ACCOUNTING
A company will have different types of expenditure, how will revenue expenditure be treated in the accounts?
what is revenue expenditure? Usually, a business will have cash coming in, which is can be known as income, and cash going out which can be referred to as expenditure. Learn more.

Accounting Equation
The accounting equation is one of the fundamental elements of double-entry accounting and the foundation for all of the concepts learned in introductory accounting. In this short video, you will learn what the equation is and what each part represents.
This video was created in relation to the Utah State CTE standards for the Accounting I High School course. Specifically, this video prepares students to complete Strand 2, Standard 2: Demonstrate an understanding of the fundamental accounting equation. Learn more.

Accounting Process for Transaction Analysis - WorldWide Webster
On the accounting process you'll recall from class the accounting process has three major steps. Learn more.

Journal Definition - What is a Journal?
Journal definition including break down of areas in the definition. Analyzing the definition of key terms often provides more insight into concepts.
The term journal can be defined as Record in which transactions are entered before they are posted to ledger accounts; also called the book or original journal. Learn more.

What is a General Ledger? (Recording Nonprofit Transactions)
What is a general ledger? A general ledger is a list of transactions by account. In this lesson, you’ll learn what transactions are, how and when to record them, and how they impact your nonprofit's accounting system. Learn more.

Depreciation explained
What is depreciation? How to calculate depreciation? Depreciation, amortization, and CapEx tutorial.
Overview of depreciation accounting (concept and application), and related topics such as accumulated depreciation, book value, residual value, historical cost, fixed assets, amortization, useful life, capital expenditures (CapEx), and capitalization. Intended for students and business people at both entry and advanced levels. Learn more.

The TRIAL BALANCE Explained (Full Example!)
Learn how to prepare a Trial Balance using T Accounts and Journal Entries. The Trial Balance is made easy in this episode of Accounting Stuff - Accounting Basics for Beginners Lesson 5 - you will learn: Learn more.

Post a Comment

0 Comments