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Checkpoint- Reflection

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Checkpoint- Reflection
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Checkpoint- Reflection

According to last week’s readings revenue expenditures are also known as “ordinary repairs”. These expenses occur frequently, are usually inexpensive, and are to maintain the business. Capital expenditures are additions and improvements being made to a company. These expenses occur to increase a company’s operating efficiency, productive capacity, or useful life of a plant asset. A company must use good judgments when deciding which expenditure to select because of the close similarities that the expenditures share. Some similarities that are shared between capital expenditures and revenue expenditures during a useful life are; they are each expenditures that help the company (revenue expenditures are to maintain the company and capital expenditures are to help increase the company’s investments), they both occur frequently, and are seemingly cost efficient.
The entries of revenue expenditure for a company that owned trucks if the business needed to repair a truck they have to pay cash to get the vehicle out of the shop. Or the company has to put brakes or tires on the truck, you pay the bill now. These repairs are recorded as debits to Repair (or Maintenance) expense as they incurred, these debits are paid immediately. Capital expenditure is when something is added on or improved to help increase the company’s investment. When something is being done to help improve the business this is going to bring in some revenue and that is money for the company. The entries for capital expenditures are debited as

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