Question

Capital expenditure is an expenditure that:

• A. Is expensed in the period it is incurred
• B. Is used to cover day-to-day operating costs
• C. Creates assets or reduces liabilities
• D. Results in a decrease in the value of assets

Answer 1

Answer:

C. Creates assets or reduces liabilities

• Capital expenditure is long-term investment by the government.

• It includes spending on things like building infrastructure, acquiring land, or repaying debt, all of which create an asset or reduce a liability.