Capital expenditure is an expenditure which
Correct answer: C. Results in the acquisition of a permanent asset
- A. Benefits the current accounting period
- B. Will benefit the next accounting period
- C. Results in the acquisition of a permanent asset
- D. Results in the acquisition of a current asset
Explanation
Capital expenditure provides a benefit beyond the current period, commonly by acquiring or improving a long-term asset. Among the choices, acquisition of a permanent asset is the defining result.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
Practise Accounting Principles
351 free Accounting Principles MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Accounting questions like this
Accounting is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Accounting Principles questions
Which of the following is not a deferred revenue expenditure?
Any donation received for a specific purpose is a_________?
Which of the following is an item of capital expenditure?
Which of the following should not be treated as revenue expenditure?
Which of the following errors affects the agreement of a Trial Balance?
The accountant of Leo Ltd. recorded a payment by cheque to a creditor for supply of materials as 1,340.56. The bank recorded the cheque at its correct amount of 3,140.56. The Company has not passed any rectification entries and the error is not detected through the bank reconciliation. The impact of this error is