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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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