(a) List six adjustments that are shown in the final accounts.
(b) State three differences between capital expenditure and revenue expenditure.
(a) Adjustments in the final accounts
i. Rent in arrears or in advance.
ii. Salaries in arrears or in advance.
iii. Provision for bad or doubtful debts.
iv. Depreciation of non-current assets.
v. Goods taken by owners.
vi. Income in arrears or in advance.
vii. Provision for discount on doubtful debts.
(b) Difference between capital expenditure and recurrent expenditure.
i. Capital expenditure occurs once a year while recurrent occurs every year. E.g construction of building occur once while salaries of staff occur every year.
ii. Capital expenditure usually involves huge financial commitment while recurrent expenditure does not involve huge financial commitment.
iii. Capital expenditure leads to acquisition of assets which have long lifespan while recurrent expenditure is consumed once and for all.
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