Question

______is that expenditure which results in acquisition of an asset or which results in an increase in the earning capacity of a business.

• A. Capital expenditure
• B. Revenue expenditure
• C. Deferred revenue expenditure
• D. None of the above

Answer 1

The correct option is A Capital expenditure

Capital expenditure refers to funds that are used by a company to acquire, improve or maintain long term assets to improve the efficiency or earning capacity of the company. Long term assets usually have a useful life of more than one year.