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The Expenses Which Will Be Related To Long Term Asset is Called Capital Expenditure.The Expenses Which Is Related To Operation Is called Revenue Expenditures.
Capital expenditures are long term expenses of business organization, and hence their cost is not deducted in one fiscal year but depreciated every year and is shown in assets side of balance sheet, Where as Revenue exp. are recurring and short term expenses, it is fully tax deducted expenses it can be repairs or other expenses which is done every month or in a year, it is listed with liabilities.
Capital Expenditure or CAPEX are all expenses related to fixed assets and are permanent for example the cost of acquisition of a car , whereas revenue expenditure are expenses for a period of time and are temporary and closed to profit and loss at the end of the accounting period. for example: salaries - transportation ...
Payments which you make for expense is revenue expenditure. Payments which you make to acquire fixed or capital nature assets is capital expenditure. In accounting term capital expenditure is depreciated as expense portion for the year over the years, Revenue expenditures are expensed out same year in which it is incurred.
