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Question
______ is an example of Capital Expenditure.
Options
Purchase of a machine.
Cleaning and greasing office fans.
Goods purchased for resale.
Money paid as taxes.
Solution
Purchase of a machine is an example of Capital Expenditure.
Explanation:
- All expenditure incurred to acquire or increase the value of fixed assets which are used in the business for the purpose of earning revenue are called capital expenditure.
- Capital expenditure results in the acquisition of permanent assets such as land and buildings, plant and machinery furniture, etc.
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