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Capital expenditure is characterised by:
AGenerally large amount, benefit over more than one accounting period, non-recurring, increases value of fixed assets
BSmall amount, recurring, immediate consumption
CAlways less than ₹10,000
DOnly on intangible assets
Answer & Solution
Correct answer: A. Generally large amount, benefit over more than one accounting period, non-recurring, increases value of fixed assets
1. Per OCR: capital expenditure has 4 characteristics — (a) generally large, (b) benefit over more than one accounting period, (c) non-recurring, (d) increases fixed asset value.
2. Examples: machinery purchase, plant construction, major repair extending life.
3. Contrast with revenue expenditure (small, recurring, single period).
_Source: ICMAI BoS CMA Foundation Paper 2 (FFCA) — Paper2_07042026.pdf, Module 1 §1.3.1 (page 20)_