why do expenditures in capital increase the assets of a firm while the cash expenditure does not but acts as a liability in form of an expense in the trading profit and loss account?
CPA PEP Prep Q&A
financial reporting, about retained earnings
Re: financial reporting, about retained earnings
by Marvin Gikaru 
- 24 Jan 2016, 8:24 AM
My understanding:
Capital expenditures: Resources in monetary form set aside for the purchase of fixed assets.
Revenue expenditures: Money set aside to cater for the efficient running of the organisation.
Re: financial reporting, about retained earnings
by Douglas Justo - 25 Jan 2016, 3:24 AM
Capital expenditure involves putting some money aside for the purchase or repair of a fixed asset, it therefore adds value to the organisation. Cash expenditure also known as revenue expenditure, involves paying for daily organisation expenses such as stationery or coffee for the workers.