Q263
Which one of the following is NOT true about capital expenditure?
A.
Creates future benefits
B.
Incurred to acquire fixed assets
C.
Incurred to increase the economic life of existing fixed assets
D.
Reduce the profit of the concern
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Capital expenditure does not reduce the profit of the concern. Capital expenditures refer to funds that are used by a company for the purchase, improvement, or maintenance of long-term assets to improve the efficiency or capacity of the company.