capital expenditure -expenditure incur to increase revenue earning capacity of a business over more than one accounting period, the benefits arising out of capital expenditure last for more than one accounting period. Example- acquisition of tangible or intangible fixed assets.
Revenue expense is incurred to generate revenue for a particular accounting period, revenue expenses expire in the same accounting period. Example- cost of goods sold, salaries, rent, etc.
CAPITAL AND REVENUE RECEIPTS:-
Capital Receipts : receipts which are not revenue in nature are capital receipts e.g. receipts from sale of fixed assets or investments, secured or unsecured loans, owners’ contributions etc.
Revenue Receipts : receipts which are obtained in course of normal business activities are revenue receipts e.g. receipts from sale of goods or services, interest income etc.