Accounting Approaches for Capital and Revenue Items

This week’s topics

Accounting Approaches for Capital and Revenue Items

1. Capitalising non-current assets
2. Charging revenue expenditure to the Statement of Profit or Loss
3. Recording capital income
4. Reporting asset values in the Statement of Financial Position
5. The INCOME STATEMENT Explained (Profit & Loss / P&L)
6. How The BALANCE SHEET Works (Statement of Financial Position / SOFP)

What you will be able to do

• 3.2 Describe the accounting approaches utilised for items of capital and revenue expenditure and income.

Activity

Start with this week’s 2 videos, then: Seminar, guided reading and a short written task: describe the accounting approaches utilised for items of capital and revenue expenditure and income.

Study materials

Videos

• The INCOME STATEMENT Explained (Profit & Loss / P&L) · YouTube · Accounting Stuff · 11 min · for registered students
• How The BALANCE SHEET Works (Statement of Financial Position / SOFP) · YouTube · Accounting Stuff · 13 min · for registered students
• Business Finance: Types of Income Explained · YouTube · Two Teachers · 8 min · for registered students
• The INCOME STATEMENT for BEGINNERS · YouTube · Accounting Stuff · 5 min · for registered students
• The BALANCE SHEET for BEGINNERS (Full Example) · YouTube · Accounting Stuff · 7 min · for registered students
• Statement of Comprehensive Income: What is it? and Why is it Important? · YouTube · Two Teachers · 4 min · for registered students
• Easy Way to Complete a Balance Sheet | Statement of Financial Position Explained · YouTube · Two Teachers · 4 min · for registered students

Further resources

• Principles of Accounting Vol. 1, ch. 11.2: Capital versus revenue expenditure · PDF · OpenStax, textbook chapter; pp. 642–644 · for registered students
• Introduction to Financial Accounting, Lyryx 2023-A, ch. 8: Long-lived Assets · PDF · Other, textbook chapter; pp. 307–350 · for registered students
• Financial Accounting, ch. 10: In a Set of Financial Statements, What Information Is Conveyed about Property and Equipment? · PDF · Saylor Academy, textbook chapter; pp. 359–414 · for registered students