PRC-1 · Chapter 6 · Question 6 of 100
Which of the following is considered a 'Capital Expenditure'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The cost of replacing a vehicle engine, which significantly extends its useful life and capacity.
Explanation
Capital expenditure results in the acquisition of non-current assets or an improvement in their earning capacity. An engine replacement that extends life/capacity qualifies; routine repairs are revenue expenditure.
More Property, Plant and Equipment MCQs
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