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Distinguish between revenue expenditure and capital expenditure in government Budget. Give an example of each |
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Answer» Solution :Capital expenditure : An expenditure which resuts in the creation of assets or reduction in LIABILITIES is TREATED as Capital expenditure, such as expenditure incurred on CONSTRUCTION of BUILDINGS, roads, bridges, etc. Reverue expenditure: An expenditure which does not RESULT in creation of assests or reduction in liabilities, is called revenue expenditure such as payments of salaries, pensions, etc. |
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