how to find the expenses/total assets in an accounting problem?
Favorite Answer
Revenue expenditures are those that will provide economic benefits only for the period when the expenditure was made.
Examples:
Rent of office space; Selling costs, salaries, interest payments
Capital expenditures are those that will provide economic benefits for more than one period.
Examples:
Acquistion of land, building, and other equipment, goodwill, or long-term investments
The tricky part I think is when it comes tor epairs and maintenance. The nature of the expenditure should be analyzed whether it extends the life of the asset or increases its quality long-term. In those cases, it should be classified as asset.
Try to browse at intrmediate accounting books. It is explained in more detail there.
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