Question

What's the difference between a capital transaction and a revenue transaction?

Answer 1

A capital transaction is one that deals with non-current assets or liabilities. A revenue transaction is one that deals with sales and also dealing with current assets and liabilities.

Explanation:

This is a business math/accounting/finance question and deals with the classification of different types of transactions.

A capital transaction is one that deals with non-current assets or liabilities, such as:

• fixed assets (ex. buying and selling equipment),
• certain kinds of investments (ex. the buying and selling of securities intended to be held for long-term investment),
• long-term debt (ex. the acquisition and paying off of loans that have terms longer than one year), and
• equity transactions (ex. dividend payments and share purchases)

These types of transactions will show up on reports dealing with cash flow (such as a Statement of Cash Flows) but not on reports that deal with revenue streams (such as an Income Statement).

http://www.investorguide.com/definition/capital-transactions.html

A revenue transaction is one that deals with sales and also dealing with current assets and liabilities, such as:

• sales of inventory and costs of inventory acquisition and/or creation
• short-term receivables and payables
• other monies received from other sources such as rents and dividends

These types of transactions will show up on cash flow and revenue stream reports.

http://www.investorguide.com/definition/revenue.html