ICSE Class X Economics 2020 Solved Papers

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Question : 20
Total: 36
State two points of difference between revenue expenditure and capital expenditure.
Solution:  
(i) Earning Capacity : Capital expenditure increases the earning capacity of the business whereas revenue expenditure does not increase the earning capacity as it is incurred for maintaining the existing earning capacity.
(ii) Nature: Capital expenditure is of a nonrecurring nature because such expenditure is not incurred every day. Whereas revenue expenditure is recurring in nature as it is incurred on day to day operations.
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