FA - Mar/July 2020 - L1 - SA - Q4 - Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS

FA – Mar/July 2020 – L1 – SA – Q4 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS

Identifying an example of capital expenditure

Question

Which of the following payments is an example of capital expenditure?
A. Refurbishment as part of upgrading a building
B. Carriage outwards in respect of goods sold
C. Legal fees incurred to recover customer debts
D. Bonuses to production operatives
E. Maintenance cost of building

Answer

A. Refurbishment as part of upgrading a building

Explanation:
Capital expenditure refers to spending on acquiring or improving long-term assets, like property or equipment. Upgrading a building is considered capital expenditure as it enhances the asset’s value.

Tags: Building Upgrades, Capital Expenditure, PPE
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS
Series: MAR/JULY 2020

Uploader: Theophilus

FA – Mar/July 2020 – L1 – SA – Q4 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS

Identifying an example of capital expenditure

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