Question

______ is an example of Capital Expenditure.

Options

• Purchase of a machine.

• Cleaning and greasing office fans.

• Goods purchased for resale.

• Money paid as taxes. 

Answer 1

Purchase of a machine is an example of Capital Expenditure.

Explanation:

1. All expenditure incurred to acquire or increase the value of fixed assets which are used in the business for the purpose of earning revenue are called capital expenditure.
2. Capital expenditure results in the acquisition of permanent assets such as land and buildings, plant and machinery furniture, etc.