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Question 152 - PK0-005 discussion

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Which of the following is a capital expense?

A.
Building lease
Answers
A.
Building lease
B.
Building purchase
Answers
B.
Building purchase
C.
Building maintenance
Answers
C.
Building maintenance
D.
Building insurance
Answers
D.
Building insurance
Suggested answer: B

Explanation:

A capital expense is the cost of acquiring or making improvements to fixed assets that have a useful life of more than one year1. A building purchase is an example of a capital expense, as it is a long-term investment that increases the value of the company's assets2. Building lease, maintenance, and insurance are not capital expenses, as they are recurring or short-term costs that do not increase the value of the company's assets3.

asked 02/10/2024
aaron black
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