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3.1 Sources of finance - notes

Role of Finance for Business AO2

AO2 You need to be able to: Demonstrate application and analysis of knowledge and understanding Command Terms: These terms require students to use their knowledge and skills to break down ideas into simpler parts and to see how the parts relate: Analyse, Apply, Comment, Demonstrate, Distinguish, Explain, Interpret, Suggest

Capital expenditure

Capital expenditure is spending to acquire or upgrade physical assets such as buildings and machinery and not for operating expenses; also called capital spending or capital expense.

Revenue expenditure

Revenue expenditure is spending related to the day-to-day running of the business, e.g. administrative and selling expenses including raw materials, wages and salaries, marketing etc