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.
View all questions of this test
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.
Which of the following is false regarding capital expenditurea)Capital...
When ever we do capital expenditures we do it for long period benefits