Mr Brown has recently started a new business and is puzzled by the terms capital expenditure and revenue expenditure.

(a) Explain to him what ‘capital expenditure’ is.

(b) Mr Brown has purchased a new van; the details of the account were as follows: LO6

£
Van 13,000 Seat belts 124 Delivery charges 242 Number plates 15 Road tax 150 Insurance 320 13,851 He has also received an account from his local builder, details of which are as follows:
£
Redecorate shop front 400 Erect shelves in stock room 90 490 You are required to list the items from both invoices under their respective headings of capital and revenue expenditure.