Question

An expenditure is a capital expenditure because ______.

Options

• The amount involved is large.

• The amount is paid in lump sum.

• It is intended to benefit the future period.

Answer 1

An expenditure is a capital expenditure because it is intended to benefit the future period.

Explanation:

Capital expenditure means the expenditure the benefit of which is not exhausted within the current year but is enjoyed over a long time period.