Question

Which of the following is an example of capital expenditure?

• A. Purchased a pencil sharpener at a cost of Rs.2
• B. Installing an escalator at cost of Rs.5,600 in a three storey building which had previously been used without escalator
• C. Painted delivery truck at a cost of Rs.450 after two years of use
• D. None of the above

Answer 1

The correct option is B Installing an escalator at cost of Rs.5,600 in a three storey building which had previously been used without escalator

Capital expenditure is a money spent by a business or organization on acquiring or maintaining fixed assets, such as land, buildings, and equipment.

Installing an escalator is a capital expenditure as it is a non-recurring expenditure.