Which of the following best explains what is meant by lsquo Capital Expenditure 39 Capital Expenditu...........

General Accounting Principles Introduction to Accounting

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Which of the following best explains what is meant by ‘Capital Expenditure'Capital Expenditure is expenditure:

On non-current assets, including repairs and maintenance.

On expensive items over $10,000.

On the acquisition of non-current assets, or improvement in their earning capacity.

On items relating to owners' capital.

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Explanation:

Capital expenditure or capital expense (capex or CAPEX) is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. It is considered a capital expenditure when the asset is newly purchased or when money is used towards extending the useful life of an existing asset, such as repairing the roof.

By: DATTA DINKAR CHAVAN

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swathi kanithi

sir in this question, why the option 1 is wrong ? it is also a capital expenditure to maintain the assets i.e repairs and maintenance. I think option 1 and option 3 both are correct.