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Financial Statements of a Sole Proprietor
Quick questions on Capital and revenue expenditure explained: O-Level Principles of Accounts
5short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is capital expenditure?Show answer
Capital expenditure is spending to acquire, improve or extend a non-current asset, plus the costs of getting it ready for use:
What is revenue expenditure?Show answer
Revenue expenditure is spending on the day-to-day running of the business, consumed within the period:
What is q1?Show answer
Classify each: buying a computer, paying the electricity bill, installing the computer, repairing a leaking roof. [2 marks]
What is q2?Show answer
A \3,000$ revenue repair is wrongly capitalised. State the effect on profit. [1 mark]
What is q3?Show answer
State whether selling an old delivery van is a capital or revenue receipt, and why. [2 marks]
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