Question

what expenditures are and how expenditures are classified

Answer 1

Expenditure is the expend or spending of money on some commodities or the money that is being spent on something.

It is classified in two types :-

Revenue Expenditure

Revenue Expenditure is an expenditure incurred for the basis other than the creation of physical or financial assets.It associates to those expenses incurred for the normal operations of the busniess and various services, interest payments on debt sustained.

Capital Expenditure

There are expenditures which results in the creation of physical or financial assets or depletion in financial liabilities. This incorporates expenditure on the investment of building, land, equipment, machinery, investment in shares and loans and advances.

DISTINGUISH BETWEEN REVENUE EXPENDITURE AND CAPITAL EXPENDITURE.
ANSWER:
BASIS	REVENUE EXPENDITURE	CAPITAL EXPENDITURE
(a)MEANING	Revenue expenditure refers to the expenditure which neither creates assets nor reduces the liability of the government.	Capital expenditure refers to the expenditure which either creates an asset or reduces the liability of the government.
(b)NATURE	They are regular and recurring in nature.	They are irregular and non-recurring in nature.
(c)TERM	Short term	Long term
(d)EXAMPLE	Payment of salaries, maintenance of roads, street light, etc.	Repayment of loans, Purchase of machinery, etc.