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Which of the following is false regarding capital expenditure
- a)Capital expenditure gives benefit over a short period
- b)Capital expenditure is recorded in balance sheet.
- c)When expenditure incurred for increasing the earning capacity of the business.
- d)When an amount is incurred in non-recurring in nature.
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Which of the following is false regarding capital expenditurea)Capital...
A is false because we do capital expenditure for long period. It is not done for short period.
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Which of the following is false regarding capital expenditurea)Capital...
False Statement: Capital expenditure gives benefit over a short period.
Explanation:
Capital Expenditure:
- Capital expenditure refers to the funds that a company spends on acquiring, upgrading, or maintaining long-term assets such as property, equipment, or infrastructure.
- It is a significant investment made by a company to improve its productivity, expand its operations, or enhance its earning capacity over a long period of time.
Analysis of the Options:
A: False: Capital expenditure does not give benefit over a short period. It is typically made for long-term purposes and aims to generate benefits over an extended period of time.
B: True: Capital expenditure is recorded in the balance sheet as an asset. It is not immediately expensed but is instead capitalized and depreciated over its useful life.
C: True: Capital expenditure is incurred for increasing the earning capacity of the business. It includes investments in machinery, technology, research and development, and other long-term assets that can contribute to revenue generation and profitability.
D: True: Capital expenditure is generally non-recurring in nature, meaning it is not a regular or repetitive expense. It is a one-time or infrequent investment made by the company.
Conclusion:
The false statement regarding capital expenditure is option A, which claims that it provides benefits over a short period. In reality, capital expenditure is aimed at generating long-term benefits and improving the earning capacity of the business.
Explanation:
Capital Expenditure:
- Capital expenditure refers to the funds that a company spends on acquiring, upgrading, or maintaining long-term assets such as property, equipment, or infrastructure.
- It is a significant investment made by a company to improve its productivity, expand its operations, or enhance its earning capacity over a long period of time.
Analysis of the Options:
A: False: Capital expenditure does not give benefit over a short period. It is typically made for long-term purposes and aims to generate benefits over an extended period of time.
B: True: Capital expenditure is recorded in the balance sheet as an asset. It is not immediately expensed but is instead capitalized and depreciated over its useful life.
C: True: Capital expenditure is incurred for increasing the earning capacity of the business. It includes investments in machinery, technology, research and development, and other long-term assets that can contribute to revenue generation and profitability.
D: True: Capital expenditure is generally non-recurring in nature, meaning it is not a regular or repetitive expense. It is a one-time or infrequent investment made by the company.
Conclusion:
The false statement regarding capital expenditure is option A, which claims that it provides benefits over a short period. In reality, capital expenditure is aimed at generating long-term benefits and improving the earning capacity of the business.
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Which of the following is false regarding capital expenditurea)Capital expenditure givesbenefit over a short period b)Capital expenditure is recorded in balance sheet.c)When expenditure incurred forincreasing the earning capacity of the business.d)When an amount is incurred innon-recurringin nature.Correct answer is option 'A'. Can you explain this answer?
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