Tag Archives: #CapitalBudgeting

Capital Exp. Vs. Working Capital: What is the difference between capital expenditure and working capital?

Capital Exp. Vs. Working Capital: Capital expenditure and working capital are two different concepts in accounting and finance. Capital expenditure It refers to the money spent on long-term assets that are expected to provide benefits for more than one accounting period. These assets include property, plant, and equipment (PP&E), intangible assets, and investments. Capital… Read More »

How does capital expenditure affect the financial statements of a business?

Does Capital expenditure affect the financial statements of a business Capital expenditures are investments made by a business in long-term assets like property, plant, and equipment. These expenditures have important implications for a business’s financial statements: 1.Balance Sheet: Capital expenditures increase the assets of the business. Long-term assets, such as buildings, machinery, and equipment, are… Read More »

What is a preliminary expense and how is it treated in a balance sheet?

What is a Preliminary Expense Preliminary Expense are the expenses that a company incurs before it starts its operations. These expenses are related to the formation, registration, and organization of the company, such as legal fees, accounting fees, and other administrative costs. In accounting, preliminary expenses are treated as an intangible asset and are shown on… Read More »

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