Accounting for IGCSE & O level - Accounting Procedures (Section 9 - No. 22)
Which of the following statements is correct about capital expenditure?
Capital expenditure is recorded in the income statement.
Capital expenditure is recorded in the statement of financial position.
Capital expenditure is used in daily operations.
Capital expenditure reduces the owner’s equity.
Explanation
Capital expenditures increase the value of non-current assets, so they are recorded in the statement of financial position.
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