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Former Member

Expenses question

Hi all,

what is meant by Capital and Operating Expenses? what is the difference between both?

Any input is highly appreciated!!

Thanks,

Avani.

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2 Answers

  • Best Answer
    Posted on Apr 14, 2008 at 07:05 AM

    Dear Avani

    To run a plant / office, what are all expenses you incur to do business, is called operating expenses

    Capital expenditure is a payment for basic assets such as property, fixtures, or machinery, but not for day-to-day operations such as payroll, inventory, maintenance and advertising. Capital expenditures supposedly increase the value of company assets and are usually intended to improve productivity.

    thanks

    G. Lakshmipathi

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  • author's profile photo Former Member
    Former Member
    Posted on Apr 14, 2008 at 08:10 AM

    hi neetha,

    capital expenses - payment by a business for basic assets such as property, fixtures, or machinery, but not for day-to-day operations such as payroll, inventory, maintenance and advertising. Capital expenditures supposedly increase the value of company assets and are usually intended to improve productivity.

    Operating Expenses

    Expenses associated with running a business but not considered directly applicable to the current line of goods and services being sold. These include Sales and Marketing, R & D, and General and Administrative costs (including the salaries of people working in these areas).

    regards

    sadhu kishore

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