Answer to Question #134688 in Accounting for Vinod

Question

What is capital expenditure ? Give two examples of capital expenditure.

Answer 1

Capital expenditures are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. Capital Expenditure is often used to undertake new projects or investments by a company.This type of financial outlay is also made by companies to maintain or increase the scope of their operations.

Examples of capital expenditure include;

• Manufacturing plants, equipment, and machinery.
• Building improvements.