capital and revenue expenditure CAPEX 1.pptx

Accounting year 10

1. Lesson guides ACCOUNTING year 10 Topic: Capital & Revenue Expenditure

2. 2 Expenditure LEARNING OBJECTIVES: You should be able to: Define capital and revenue expenditures. Define capital and revenue receipt Classify items into capital and revenue Activity 1: Define business expenditures

3. 3 Revenue Expenditure Activity 2: From the above examples, Define revenue expenditures.

4. 4 Capital Expenditure (Capex) Activity 3: From the above examples, define capital expenditure

5. https:// www.youtube.com/watch?v=Hq-E-xzuzhs&t=172s Watch the above video and do activity 4 and 5 in the next slides. 5 Capital and Revenue Expenditures

6. Capital and Revenue Expenditures Activity 4 Classify the following expenses either as capital expenditure or revenue expenditure: (a) Electricity bill for year (b) Costs of new heating system (c) Installation costs of new heating system (d) Carriage inwards on new boiler for heating system (e) Repair costs of heating system (f ) Upgrade of boiler in three years’ time.

7. 2023/11/20 Activity 5 In a fast food outlet divide the following costs according to whether they are capital expenditure or revenue expenditure: (a) Purchase of deep fat fryer (b) Painting logo outside new premises (c) Rental charge for premises (d) Purchase of buns for burgers (e) Delivery charge for deep fat fryer (f) Interest charge on loan taken out to purchase deep fat fryer (g) Part-time staffing costs (h) Purchase of drinks machine. Capital and Revenue Expenditures

8. 2023/11/20 Capital and Revenue Expenditures Activity 6 For the business of H Ward, a food merchant, classify the following between ‘capital’ and ‘revenue’ expenditure: ( a ) Repairs to meat slicer. ( b ) New tyre for van. ( c ) Additional shop counter. ( d ) Renewing signwriting on shop. ( e ) Fitting partitions in shop. ( f ) Roof repairs. ( g ) Installing thief detection equipment. ( h ) Wages of shop assistant. ( i ) Carriage on returns outwards. ( j ) New cash register. ( k ) Repairs to office safe. ( l ) Installing extra toilet.

9. 2023/11/20 Capital and Revenue Expenditures Activity 7 Explain clearly the difference between capital expenditure and revenue expenditure. State which of the following you would classify as capital expenditure, giving your reasons: ( a ) Cost of building extension to factory. ( b ) Purchase of extra filing cabinets for sales office. ( c ) Cost of repairs to accounting machine. ( d ) Cost of installing reconditioned engine in delivery van. ( e ) Legal fees paid in connection with factory extension.