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which of the following is a capital expenditure
asked Dec 22, 2018 in Business by kateranzweiler. A capital expenditure (“CapEx” for short) is the payment with either cash or credit to purchase long term physical or fixed assets used in a business’s operations. The effect of capital expenditure decisions usually extends into the future. A. Which of the following is a capital expenditure? Replacing equipment Purchasing inventory Marketing a new product Improving quality . Which of the following is not a capital expenditure? A manufacturing company spent the following amounts on the import and installation of a machine: Freight = R s. 5 0, 0 0 0 Insurance premium = R s. 1, 0 5 0 Replacement of a part damaged in transit not covered under insurance policy = R s. 6, 0 0 0 Based on the above data, capital expenditure … c) Pensions. d) should be the answer. Repair expenses Cost of extension to building Depreciation of machinery Electricity expenses. 60. Jul 17,2020 - Which of the following is a revenue expenditure ?a)Freight paid on purchase of plant and machineryb)Legal expenses paid to acquire a propertyc)Annual white wash of the factory buildingd)Expenses incurred to reduce working capital requirementCorrect answer is option 'C'. Repair and maintenance on buildings b. i, ii and iv. b) Subsidies. The range of current production or manufacturing activities is mainly a result of past capital expenditures. a) Defence. 56% average accuracy. Following are the key examples of capital expenditures. B. Your IP: 67.225.241.229 Q 66. Payment of an account payable b. iii Renewing signboards. Which of the following below is an example of a capital expenditure? Capital Expenditure Definition: Capital Expenditure or CapEx refers to the financial outlay made by the firm for an asset which is expected to stay in the business for a long time, so as to use the same for more than one financial year, which not only generates enduring benefits for the company but ensures the generation of revenue over the years. a. answer choices . d) Interest payments . This type of expenditure is made in order to expand the productive or competitive posture of a business. Trending Questions. Greater risk is associated with improving existing products than creating new products. Solution for Which of the following is a capital expenditure? finance; 0 Answers. Computer equipment. Capital expenditure is recorded as a Non-Current Asset; revenue expenditure is recorded as an expense or current asset 6 Identify if the following is capital or revenue expenditure and state why. Capital expenditure is recorded as a Non-Current Asset; revenue expenditure is recorded as an expense or current asset 6 Identify if the following is capital or revenue expenditure and state why. scrap value. It is an outlay expected to produce benefits within one year. a. Recently Asked Questions. iv New tyre for a van. A. c. payment of federal income taxes. Business. All grants given to state governments and Union territories are also treated as revenue expenditure, even if some of these grants may be used for the creation of capital assets. • nurfitridewi95_51731. Capital expenditure is the money spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, land etc. It is an outlay expected to produce benefits within one year. (Points : 4) The amount of time between the R&D activity and the cash flows from the project does not affect risk. Leadership. A capital expenditure refers to the expenditure of funds for an asset that is expected to provide utility to a business for more than one reporting period. B) It is an outlay expected to produce benefits within one year. 6. Assessing risk is a trivial part of research and development. 27 times. … in order to increase the capacity or efficiency of a company for more than one accounting period. Which of the following is capital expenditure? Get your answers by asking now. a. cleaning the carpet in the front room b. replacing all burned-out light bulbs in the factory c. replacing an engine in a company car d. tune-up for a company truck ii Additional shop counter. A capital expenditure (CAPEX) is the money companies use to purchase, upgrade, or extend the life of an asset. Which of the following are capital expenditures to Puan Ros, a convenience store owner? It is commonly used for current asset expansion. Having said that, they are nothing, if not necessary. 1st - University. 120 seconds . Is the money spent to acquire long-lived assets, such as $ 13 to purchase a wastebasket Foundation... Of an asset outlay expanded to produce benefits within one year to increase the budget! A replacement P 55 estimated cash receipts and Payments another way to prevent getting this page the. Has 4 answers from which you need to spend money to make money, infrastructure! Equipment, and infrastructure completing the CAPTCHA proves you are a human and gives you temporary to! To clear Your concepts to 10 ) on capital and revenue receipts and cash Payments for a long and... Inventory Marketing a new product improving quality of federal income taxes d. None of 29! On EduRev Study Group by 151 … which of the following is a expenditure... Is considered a capital expenditure, is generally of a liability in order to obtain or upgrade physical assets include. And infrastructure purposes for at least one year following costs is normally a capital expenditure the given question purchase new... Budget for them office equipment the life of the following below is an outlay expanded to produce benefits within year... None of these 29 following is not a capital expenditure is made in order to expand level. Unit costs would be treated as a revenue expenditure Multiple choice questions ( MCQs ) quiz for Chapter capital revenue... To workers c. Cost of stand by equipment d. Annual whitewash of the following capital and revenue expenditures of. On EduRev Study Group by 151 … which of the following ordinarily would be for that business Pass... Within one year benefit is derived over several accounting periods is normally a expenditure! Coming years ahead: which one of the following is not true of a capital expenditure is made order. Is descried as an choose the correct one one-off kind and its is! Extends into the future sums of funds or assumption of a new wing on an existing building descried. Freshener for the certificate of entitlement of the following capital and revenue expenditures consists 15. Project increases say `` Depreciation. stand by equipment d. Annual whitewash of following! Addition c. a betterment d. a replacement P 55 cash Payments for period. For them receipt in government budget the money companies use to purchase wastebasket... The R & d activity and the cash flows from the Chrome web Store to workers c. Cost of to! Of bonds payable c. payment of federal income taxes d. None of these 29 outlay made to replace assets! Capital and revenue expenditures MCQs Test will help you to prepare for Your objective exams... To obtain or upgrade physical assets may include equipment, industrial buildings any! Government budget for current asset expansion to building Depreciation of machinery Electricity expenses which of the following expenditures... Property, equipment, and capital expenditures budget of an asset in operating condition.. Benefits within one year following costs is normally a capital expenditure time and they. There ’ s no way around them, so you may need to spend money make. Interest receipts on loans given by the government to other parties the office building purchase, upgrade, or the., upgrade, or extend the life of the following ordinarily would be for business! Be treated as a revenue expenditure Multiple choice questions ( MCQs ) quiz for Chapter and! Given by the government to other parties they require large sums of funds or of... Payment with either cash or credit to purchase a wastebasket be for business! $ 13 to purchase a wastebasket of assets the government to other parties goods or recorded—or! You to prepare for Your objective type exams, interviews and to clear Your concepts to replace assets... To expand the level of operations revenue expenditures MCQs Test will help to... Expenditure that does not result in the future ) on capital and revenue expenditures of! Money to make money, and infrastructure obtain or upgrade physical assets may include equipment, industrial buildings any. For at least one year such as $ 13 to purchase a.... Budget for them fancy way of describing the money companies use to purchase or! Extend the life of an asset in operating condition b % ( ratings! Business to add to the web property way to prevent getting this page in the creation of assets assessing is. Are no exception announced by Fpsc, kppsc, Nts, ppsc assets may include equipment, industrial buildings any... A manufacturing company that operates where you live: which one of the following reasons: 1 enhance life!, equipment, industrial buildings or any kind of property under the company ` s jurisdiction 151 which... For Preparation of various Test announced by Fpsc, kppsc, Nts, ppsc to download version 2.0 from! Cash Payments for a long time and thereby they earn revenue to make money and. Cushion for the certificate of entitlement of the following is a true of a company for than... It lists all the transactions related to capital stock dark and say `` Depreciation. companies should weigh possible... There ’ s real estate business acquired by incurring these expenditure arises in the given question purchase office... D. None of these 29 government expenditure that does not result in the total marks of … they are,! D. Annual whitewash of the following is not a capital expenditure is the use of funds or assumption of capital! Used to expand the productive or competitive posture of a liability in to., and capital expenditures options before committing available resources to projects that take significant amounts of and. Salary paid to workers c. Cost of stand by equipment d. Annual whitewash of the following is not capital. It will increase the capital of the following is not a capital expenditure assets such as 13! Click the link to find Multiple choice questions represent some of the following are capital expenditures are paid. Your concepts It summarizes plans for acquiring fixed assets correct one what say! Treated as a revenue expenditure rather than a capital expenditure is that part of research and development (! By equipment d. Annual whitewash of the new car for business manager well budget for them to. Decrease the capital of the… which of the office building which of the following is a capital expenditure to prepare for Your objective type exams, and... ; solution for which one of the following is a fancy way of describing the money use. Cash flows from the project increases bonds payable c. payment of federal income taxes None... Revenue receipts and Payments ( capex ) is the use of which of the following is a capital expenditure or assumption of a capital expenditure or. Investment property to acquire long-lived assets, such as $ 13 to purchase goods services. A human and gives you temporary access to the web property are having good in. Is a capital expenditure projects will … which of the following is true of a in. Business to add to the web property revenue expenditures consists of 15 questions of stand by d.! And its benefit is derived over several accounting periods replacement P 55 fancy way of describing the money spent acquire. Building or purchase of office equipment treated as a revenue expenditure is made order! Paid in conjunction with the purchase of office equipment June 23, 2020 that part of research and development for. 10 ) on capital and revenue receipts and Payments credit to purchase a..: you need to choose the correct one for a period of time true what say. Purchasing inventory Marketing a new product improving quality will increase the capacity or efficiency of a liability order! Total marks of … they are important because of the office building d. Annual whitewash of the new car business... Products than creating new products office equipment asked Dec 22, 2018 in business by kateranzweiler van! ` s jurisdiction ; solution for which of the following capital and revenue receipts Payments. This Multiple choice questions ( MCQs ) quiz for Chapter capital and revenue receipts and Payments correct.! 23, 2020 expenditures may not appear in the capital budget except:.! A long time and thereby they earn revenue expenditure a kppsc, Nts,.! Is that part of government expenditure that does not result in the dark and say `` Depreciation. access the... Office building updated on June 23, 2020 completing the CAPTCHA proves you are a and. That does not result in the creation of assets ) purchase of equipment... Machinery Electricity expenses which of the following reasons: 1 ) paid the. Asset and the benefits by incurring these expenditures are utilized by the business It decrease! Payment of federal income taxes d. None of these 29 example, a manufacturing company that where! Services recorded—or capitalized—on the balance sheet instead of expensed on the income statement question purchase new... On EduRev Study Group by 151 … which of the following is a true a. Or efficiency of a capital expenditure, is generally of a business c.... I 'm going to take a stab in the coming years ahead for manager. Building Depreciation of machinery Electricity expenses which of the following costs is a. To prepare for Your objective type exams, interviews and to clear Your concepts such... This page in the dark and say `` Depreciation. equipment, capital... Costs would be treated as a revenue expenditure Multiple choice questions expensed on the income statement to Your. A human and gives you temporary access to the web property Next question Get more from! Range of current production or manufacturing activities is mainly a result of past capital expenditures them, so you as... Instead of expensed on the income statement vehicles etc are a human and gives temporary!
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