Question

Give any three examples of Capital expenditure.

Hint:

Capital expenditures are non-recurring and appear as assets on the Balance Sheet, not in the Profit & Loss Account.

Answer 1

1. Purchase of land or building.
2. Installation of new machinery.
3. Expenditure incurred to extend the life of existing fixed assets.

Solution:
Capital Expenditure refers to spending incurred to acquire or improve fixed assets, which provide long-term benefits to the business. These are treated as assets, not expenses.