CLASSIFICATION OF

EXPENSES
PERSENTED BY :->
SHAIKH AAMIR
CLASSIFICATION OF EXPENSES
what is expenditure ?
when we spend some money for earning profir or revenue is
called expenses.
for example:
company produse mobiles for that they spend money on
it i.e
matrial 200+wages 500+pakage 50+
salary 150=900 (expenses is 900)
company sold it Rs.1200.
profit and ravenue is 1200-900=300
 EXPENDITURE IS BROADLY DIVIDED
INTO TWO PARTS

1. Capital expenditure.
2. Revenue expenditure.
 Capital expenditure
capital expenditure is that expenditure the benefit of
which is enjoyed or consumed not in one year only but
over many years.
the main purpose of incurring such expenditure is to
earn income over period of years or increasing the
earning capacity of the business concernwith aid of
such expenditure.
for eg=>>
purchase of plant and machinery,land and building
etc.
this assets used over period of years.
Revenue expenditure
revenue expenditure is expenditure which incurred
in one year but the benefit or fruit of this expenditure
enjoy only on this year.
this expenditure does not increase the earning
capacity of the business.
this type of expenditure incurred every year
for eg=>>
office expenses,delivery expenses,advertisemant
exp,rent,salaries,wages etc.
DEFERRED REVENUE EXPENDITURE
This is heavy revenue expenditure may be incurred
in one year but its benefit can enjoyed for more than
one year .this is quasi capital nature.
for eg=>>
Heavy expenditure made on advertising expected to
give benefit for two or more year.
(TATA SKY).in general this is revenue expenditure
but the benefit of this expenditure is two or more years
that for is called deferred revenue expenditure.
THANK U

ANY QUIRES ?