Which of the following statement is INCORRECT about capital expenditure?
It maintains the earning capacity of business.
The correct answer is option 1. Capital expenditure is incurred for the acquisition or improvement of long-term assets and maintains the earning capacity of the business over multiple years. It is a non-recurring expenditure, unlike operational or revenue expenditure which occurs regularly.
Similar Questions
Which of the following options DO NOT relate to examples of revenue expenditure?
a) Repair expenses
b) Insurance expense
c) Installation expenses
d) Overhauling expenses of second-hand machinery
Which among the following is a capital receipt?
Important Questions from Capital & Revenue Account
Which among the following is a capital receipt?
Which of the following statement is INCORRECT about capital expenditure?
A company has spent Rs. 20,000 on painting of its building. It should be recorded as
Depreciation on fixed assets is an example of
The amount spent to increase the earning capacity of a business is:
