Which of the following is true of a capital expenditure?
A) It is an outlay made to replace current assets.
B) It is an outlay expected to produce benefits within one year.
C) It is commonly used for current asset expansion.
D) It is commonly used to expand the level of operations.

Question

Quizplus · Accepted Answer

Capital expenditures are typically used to expand the level of operations, such as purchasing property, plant, and equipment, while current asset expansion is typically funded through operating expenditures. Capital expenditures are not expected to produce benefits within one year, as they are investments in long-term assets.

Which of the Following Is True of a Capital Expenditure