Which of the following items would be considered as capital expenditure?
A)Power used during the current month
B)Purchase cost of property,plant or equipment
C)Minor repairs to a 2-year-old vehicle
D)Regular 6-monthly oil changes on a vehicle

Question

Quizplus · Accepted Answer

Capital expenditures are those expenses that are used to acquire, improve, or extend the life of fixed assets such as property, plant or equipment. Purchase cost of property, plant or equipment is a capital expenditure as it is used to acquire or improve the fixed assets of a business. Power used during the current month, minor repairs to a 2-year-old vehicle, and regular 6-monthly oil changes on a vehicle are all considered as operating expenses.

Which of the Following Items Would Be Considered as Capital