Capital equipment and operating equipment are two types of assets that a company may use to operate its business. The main difference between capital equipment and operating equipment is their purpose and usage.
Capital equipment refers to long-term, high-cost assets that are used to produce goods or services, and are expected to last for a relatively long period of time, typically several years. These assets are usually essential to the company's operations and are not easily replaceable. Examples of capital equipment include machinery, vehicles, computers, and buildings. Capital equipment is usually accounted for as a fixed asset on the balance sheet and is depreciated over time.
On the other hand, operating equipment refers to short-term, low-cost assets that are used on a daily basis to support the company's operations. These assets are often consumable or require frequent replacement due to wear and tear. Examples of operating equipment include office supplies, cleaning equipment, and maintenance tools. Operating equipment is usually accounted for as an expense on the income statement and is deducted from revenue to determine net income.
In summary, capital equipment is a long-term investment that is essential to the company's operations and is expected to last for several years, while operating equipment is a short-term asset that is used on a daily basis and is expected to be replaced frequently.