Capital and Revenue Expenditure Quiz

Which of the following best describes capital expenditure?

• Regular monthly payments for office supplies

• One-time investment in long-term assets

• Daily operational expenses

• Short-term maintenance costs

A company spends on purchasing new manufacturing equipment. This is classified as:

• Revenue expenditure

• Operating expense

• Current liability

• Capital expenditure

Revenue expenditure is best characterized by:

• Building purchases

• Regular maintenance costs

• Land acquisition

• Factory expansion

Which expense would NOT be considered a capital expenditure?

• Employee salaries

• New factory building

• Patents and trademarks

• Heavy machinery

A repair that extends machinery life by 5 years is:

• Operating expense

• Current liability

• Capital expenditure

• Revenue loss

Which characteristic distinguishes revenue expenditure from capital expenditure?

• One-time payment

• Short-term benefit

• Asset creation

• Long-term investment

When a company spends on monthly rent, this is classified as:

• Capital gain

• Fixed asset

• Revenue expenditure

• Capital expenditure

Purchasing goodwill from another business is an example of:

• Revenue expenditure

• Operating cost

• Recurring expense

• Capital expenditure

Regular machine oil changes costing monthly are:

• Capital expenditure

• Revenue expenditure

• Fixed asset addition

• Long-term investment

Which statement about capital expenditure is correct?

• It provides immediate benefits

• It creates future economic benefits

• It occurs daily

• It has no effect on asset value