Difference between Capital and Revenue Essay Example | Topics and Well Written Essays - 250 words

Difference between Capital and Revenue - Essay Example For instance, revenue can be funds that go towards staffing, utilities, daily supply, or purchases of services for external providers. In financial accounting these costs are referred to as revenue expenditures. These sorts of expenditures can be contrasted with capital. Capital, while physically constituting the organizations’ operating funds just like revenue, is spending that goes towards long-term assets. One recognizes that just like revenue expenditures, capital expenditures can constitute a variety of things. The main understanding that differentiates revenue expenditures from capital expenditures, however, is that capital expenditures are things that will last or have a shelf life for a number of years (‘What is a capital expenditure versus a revenue expenditure’ 2010). For a technology company, capital expenditures could constitute everything from buildings to expensive information technology platforms. For an oil company such as EXXON, capital expenditur es would be deep-water oilrigs, pipelines, or other such long-term