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Wednesday, March 17, 2010

Capital and Revenue

Capital and revenue are two important basic terms of accounting where the word "Capital" refers to the owner's investment in business in terms of money or its worth. It is invested either to acquire fixed assets or to operate the business smoothly. The term "Revenue" denotes the amount received from sale of goods or rendering of services.

Relating to these two terms, major concepts are as follows:
  1. Capital Expenditure and Revenue Expenditure.
  2. Capital Receipts and Revenue Receipts.
  3. Capital Profit and Revenue Profit.
  4. Capital Loss and Revenue Loss.

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