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Question
What is capital expenditure?
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Solution 1
Capital expenditure is the government expenditure which reduces the liability of the government and also creates assets for the government such as domestic or multinational corporation shares purchased by the government.
Solution 2
It is an expenditure incurred during an accounting period, the benefits of which will be available for more than one accounting period. It includes any expenditure resulting in the acquisition of any fixed asset or contributes to the revenue earning capacity of the business. It is non-recurring in nature.
RELATED QUESTIONS
What is revenue expenditure?
Is the following revenue expenditure or capital expenditure in the context of government budget? Give reason.
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| 1. | Revenue Expenditure | 100 |
| 2. | Capital Receipts | 40 |
| 3. | Net Borrowings | 38 |
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| 6. | Non-tax Revenue | 15 |
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| 1. | Revenue Expenditure | 100 |
| 2. | Capital Receipts | 40 |
| 3. | Net Borrowings | 38 |
| 4. | Net Interest Payments | 27 |
| 5. | Tax Revenue | 50 |
| 6. | Non-tax Revenue | 15 |
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| 1. | Revenue Expenditure | 100 |
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| 3. | Net Borrowings | 38 |
| 4. | Net Interest Payments | 27 |
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| 6. | Non-tax Revenue | 15 |
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