alleryStart learning →What does a capital expenditure budget list?
ACash receipts expected from customers
BOperating expenses by department
CMaterials to be bought during the year
DFixed assets planned for future purchase
Answer & Solution
Correct answer: D. Fixed assets planned for future purchase
1. A capital expenditure budget lists the fixed assets a company plans to acquire over a future period.
2. Some replace assets that are aging or outdated, and others add capacity to meet growing demand.
3. Machinery by department, delivery vehicles and office equipment are typical lines.
4. Materials for production are covered by the direct materials purchases budget instead.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 7.11 Capital Expenditure Budget_
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