PRC-1 · Chapter 1 · Question 45 of 100
Which of the following transactions undertaken by 'Pioneer Manufacturing' represents a capital expenditure?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Purchasing a new robotic assembly arm for the production line.
Explanation
Capital expenditure involves acquiring or improving non-current assets that provide long-term economic benefits, such as a new machine. Routine costs like bills, servicing, and raw materials are revenue expenditures.
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