State the basis of classifying government expenditure into revenue and capital expenditure. Give an example of each.
CBSE DELHI - SET 1 2006
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An expenditure that neither creates an asset nor reduces a liability is categorised as revenue expenditure. If it creates an asset or reduces a liability, it is categorised as capital expenditure.Examples:
Cap. Exp. - Repayment of loan, etc.
Rev. Exp. - Salaries to govt. Employees, etc.
Cap. Exp. - Repayment of loan, etc.
Rev. Exp. - Salaries to govt. Employees, etc.
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