An example of capital goods isa)Microwaveb)Plantc)Fand)TVCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

B Yess....plant beacuse capital goods are those which help in the process of production of other goods and serveces.

Answer

Capital goods are man-made, durable items businesses use to produce goods and services. They include tools, buildings, vehicles, machinery and equipment.
Capital goods are also called durable goods, real capital, and economic capital. Some experts just refer to them as 'capital.' This last term is confusing because it can also mean financial capital. In accounting, capital goods are treated as fixed assets. They’re also known as “plant, property, and equipment.”

Answer

Plant because it can be used for further production

Answer

Plant because it is a asset

Answer

Thanxs

Answer

Yaacorrect answer is 'B'

Answer

Definition of Capital Goods
Capital goods are tangible assets that are used in the production of goods and services. These goods are not directly consumed by individuals but rather play a crucial role in the production process. Capital goods are typically long-term investments that enable businesses to produce other goods and services efficiently.

Explanation of the Correct Answer
The correct answer in this case is option B, which is 'Plant'. Here's an explanation of why 'Plant' is considered a capital good:

1. Definition of Plant
In the context of capital goods, the term 'Plant' refers to the physical infrastructure or equipment used in the production process. It includes machinery, tools, buildings, and other fixed assets that are essential for the production of goods and services.

2. Role of Plant as a Capital Good
Plant plays a vital role as a capital good because it enhances the productive capacity of a business. By investing in plant assets, a company can increase its efficiency, output, and overall productivity. These assets are used repeatedly in the production process, allowing businesses to generate income and create value.

3. Example of Plant as a Capital Good
For example, let's consider a manufacturing company that produces automobiles. The plant assets of this company would include the factory building, assembly lines, robotic machinery, and other equipment required for the production of cars. These assets are not directly consumed by individuals but are essential for the company to manufacture and deliver automobiles to the market.

4. Characteristics of Plant as a Capital Good
- Longevity: Plant assets are designed to be durable and have a long lifespan, allowing businesses to use them over an extended period.
- Productivity Enhancement: The primary purpose of plant assets is to enhance the productivity and efficiency of the production process. They enable businesses to produce goods and services in larger quantities and at a faster pace.
- High Initial Investment: Acquiring and maintaining plant assets often requires a significant initial investment. However, these assets can provide long-term benefits and returns if properly utilized.

Conclusion
In conclusion, capital goods are tangible assets used in the production process, and plant assets are a specific type of capital good. Plant assets, such as machinery and buildings, play a crucial role in enhancing productivity and efficiency in various industries. They are long-term investments that enable businesses to produce goods and services efficiently, making them an essential component of the capital goods category.

Similar Commerce Doubts

Which one is a capital transaction? * Purchase of goods Payment of wages Sales of goods Purchase of machinery?

What is capital goods?

total assets 1,50,000 creditors for goods 90,000 creditors for expenses 15,000. find out capital from the following information Related: Recording Of Transactions – I - Accounting Equation Solutions?

Prepare capital account of Ram in T-shape and balance it from the following transactions: 20,000 and goods 30,000 10,000 (0) Commenced business with cash (i) Drawing during year 7,000 (iii) Additional capital introduced (o) Loss during year 4,000?

Top Courses for CommerceView all

Chapter Notes for Commerce

Economics Class 12

Economics Class 11

NCERT Books & Solutions for Commerce

Economics for CBSE Class 12 Board Examinations

Top Courses for Commerce

Top Courses for Commerce

Related Content

Commerce Courses

Other Courses

How To Prepare?

Related Exams

Company