Question

Give the word term or phrase which can substitute each of the following statements :

Expenditure on fixed assets which increases the earning capacity of the business.

Answer 1

Expenditure on fixed assets which increases the earning capacity of the business- Capital Expenditure

Explanation:
Any expenditure incurred on purchase of fixed assets and which is non-recurring (infrequent) in nature is known as capital expenditure. For example: expenditure for purchase or extension of a building. These expenditures increase the value of the fixed assets and its benefits can be derived in the near future.