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Questions
Give four examples of capital expenditure.
Give five examples of capital expenditure.
Give two examples of capital expenditure.
Solution
- Purchase of land, building, plant and machinery, equipments, furniture, loose tools, etc.
- Cost of addition, extension and improvements to existing fixed assets.
- Cost of overhauling second hand machines.
- Expenses incurred for putting an asset into a working condition.
- Cost of increasing or improving the earning capacity or installed capacity of the business.
- Cost of intangible assets such as goodwill.
- Expenses incurred in connection with the purchase of land or building such as fees paid to lawyer or registration fee.
Notes
Students should refer to the answer according to their questions.
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