What do you mean by Capital expenditure? Why is repayment of loan, pur

1.	What do you mean by Capital expenditure? Why is repayment of loan, purchase of railway coach from Japan, construction of a bridge and purchase of share in a company a capital expenditure?
Answer» Capital expenditure is an expenditure which either creates an asset or reduces any liability Repayment of loan reduces the liability of government. So treated as capital expenditure. Purchase of railway coach from Japan creates an asset. So treated as capital expenditure. Construction of a bridge creates an asset. So treated as capital expenditure. Purchase of share in a company creates an asset. So treated as capital expenditure.

What do you mean by Capital expenditure? Why is repayment of loan, purchase of railway coach from Japan, construction of a bridge and purchase of share in a company a capital expenditure?

Answer»

Capital expenditure is an expenditure which either creates an asset or reduces any liability

Repayment of loan reduces the liability of government. So treated as capital expenditure.

Purchase of railway coach from Japan creates an asset. So treated as capital expenditure.

Construction of a bridge creates an asset. So treated as capital expenditure.

Purchase of share in a company creates an asset. So treated as capital expenditure.

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What do you mean by Capital expenditure? Why is repayment of loan, purchase of railway coach from Japan, construction of a bridge and purchase of share in a company a capital expenditure?

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