Which of the following is a capital expenditure?
Answer and explanation
Correct answer: C. Purchase of a delivery van
- Step 1: Capital expenditure buys or improves a non-current asset that benefits more than one year. Answer: Purchase of a delivery van. Why not the others: Payment of the van's insurance: Insurance is a running expense. Repairs to the van: Repairs keep the asset in working order and are revenue expenditure. Fuel for the van: Fuel is a running expense.
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More Accounting concepts and double entry questions
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