Accounting Multiple Choice Question – 30 November 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Which of the following is capital expenditure?

Select ONE answer:

  1. The cost of repairing a vehicle.
  2. The cost of acquiring a vehicle for re-sale.
  3. Proceeds arising from the sale of a van that had been used in the business to make deliveries to customers.
  4. The cost of a new vehicle acquired for continuing use in the business.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

  1. Not correct – The cost of repairing a vehicle is revenue expenditure.
  2. Not correct – The cost of acquiring a vehicle for re-sale (a purchase) is revenue expenditure.
  3. Not correct – Proceeds arising from the sale of a van that had been used in the business to make deliveries to customers is a capital receipt.
  4. Correct

 

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