identify the statement that accurately describes why a transaction should be treated as a capital rather than an expense
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- What factors need to be considered in determining whether a receipt is of an income or of a capital nature?Why is it necessary to make a distinction between Capital and Revenue Receipts and Capital and Revenue Expenditure in Accountancy?Explain why it is important to distinguish between capital expenditure and revenue expenditure, and briefly explain the accounting treatment of each type of expenditure.
- Define the terms revenue and expense. How are these terms related?Asset Valuation and Income Recognition. Asset valuation and recognition of net income closely relate. Explain, including conditions when they do not.How does the revenue-expense approach differ from the asset-liability approach fordefining accounting elements?