Capital and Revenue Income, Capital and Revenue Expenditure. Intangibles.

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Jordanna Males         Unit 5 Business Accounting         20/09/2012

P2 Assignment

Capital Income –                                                                                                                                     Capital income is money that has been invested by the owners or other investors; it is used to set up the business or to buy equipment. The money is usually used to buy equipment that is going to stay in the business for a long period of time, for example the ‘Smoothie and Snack bar’ business, the owner would have used the invested money to pay for premises, place to store the snacks and the Smoothie machine as he will be using these for a long period of time. These are called fixed assets. Stock should be paid for by sales income but some business’s use their invested money to pay for opening stock to help them get their business started. A sole trader is a person that owns their own business, they usually put their own money (person savings) into their business or they borrow money from a bank. Partnership is when two or more people join together to make their own business, when doing this both of the partners in the business are expected to put money towards the capital income.

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Revenue Income –                                                                                                                          Revenue income is money that comes into the business from selling goods or providing a service, it can come from sales, rent received or commission received. Sales are money coming in from the sales of goods and ...

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