The expenditure incurred for day to day running of the business or for
maintaining the earning capacity of the business is known as revenue
expenditure. It is recurring in nature. It is incurred to generate revenue for
a particular accounting period. The revenue expenditure may be incurred in
relation with revenue or in relation with a particular accounting period. For
example, cost of purchases is a revenue expenditure related to sales revenue.
Rent and salaries are related to a particular accounting period.
Following are the features of
recurring in nature.
incurred for maintaining the earning capacity of the business.
benefit expires in the same accounting period.
shown on the debit side of the trading and profit and loss account.
of goods for resale.
selling and distribution expenses.