Explain the difference between revenue expenditures and capital expenditures and how they are recorded in the accounting system.

Revenue expenditures do not materially increase an asset's life or productive capabilities.An example is ordinary repairs where benefits expire in the current accounting period.Revenue expenditures are debited to expense and are thus matched with current revenues.Capital expenditures make a plant asset more productive or extend its useful life.Examples are extraordinary repairs and betterments that benefit future periods.Capital expenditures are debited to asset accounts and are matched with future periods through depreciation expense.Immaterial (low cost)long-term expenditures are treated as current period expenses.