Distinguish between Capital Expenditure and Revenue Expenditure: 

1. 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. 

2. Period of Benefit: The benefit of capital expenditure extends to more than one year. But the benefit of revenue expenditure extends only to the current year. 

3. Accounting Treatment: Capital expenditure is shown in the Balance Sheet as an asset. Whereas revenue expenditure is shown as an expense in the Trading Account or Profit and Loss Account. 

4. Nature: Capital expenditure is of a non-recurring 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. 

5. Effect on Assets: Capital expenditure leads to increase in the value of fixed assets. But revenue expenditure does not result in increase in the value of these assets.