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Question

Which of the following expenditure is not regarded as Capital Expenditure?

A acquisition of land Correct Answer Incorrect Answer
B development of machinery Correct Answer Incorrect Answer
C Creation of building assets Correct Answer Incorrect Answer
D Payment of Salaries Correct Answer Incorrect Answer
E creation of health facilities Correct Answer Incorrect Answer

Solution

The money spent by the government on the acquisition and/or development of machinery, buildings, health facilities, education, and so on is known as capital expenditure. By adding or enhancing industrial facilities and increasing operational efficiency, capital spending creates long-term assets and helps the economy to earn money for many years.

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