Capital Expenditure Notes

Vocabulary flashcards covering the definition, features, and characteristics of capital expenditure based on the provided lecture notes.

Capital Expenditure

Expenditure that results in the acquisition of long-term assets, specifically fixed assets, or is incurred for the betterment or replacement of fixed assets.

Fixed Assets

Long-term assets acquired by capital expenditure that are used by a business and not intended for resale.

Earning Capacity

The ability of a business to generate income, which capital expenditure aims to increase through specific costs.

Non-recurring expenditure

A characteristic of capital expenditure indicating that it is a non-repetitive cost.

Long-term assets

Assets acquired through capital expenditure whose useful life is at least more than $1$ accounting period.

Benefit period of Capital Expenditure

The duration over which the advantages of a capital expenditure accrue, which is described as being over a long period of time.

Betterment

The improvement of fixed assets through expenditure that increases their quality or quantity.