Question

Expenses incurred for obtaining a license for starting a factory are ______________.

• A. capital Expenditure
• B. revenue Expenditure
• C. deferred Revenue Expenditure
• D. prepaid Expenses.

Answer 1

The correct option is A capital Expenditure

Capital Expenses or Expenditures are payments by a business for fixed assets, like buildings and equipment. Capital expenses are not used for ordinary day-to-day operating expenses of a business. Another way to consider capital expenses is that they are used to buy assets that have a useful life of more than one year.