This document discusses the differences between capital and revenue expenditures. It explains that capital expenditures are expenses that increase the earning capacity of a business over the long term, such as purchasing fixed assets. Revenue expenditures are recurring expenses needed to run the business and maintain assets, like salaries, rent, and repairs. It is important to properly classify expenditures as capital or revenue when preparing financial statements in order to accurately calculate profit and not overstate dividends. The document provides examples of different types of capital and revenue expenditures.