Q. With reference to Capital Expenditure (CapEx), consider the following statements:
1.Capital expenditure always results in the creation of a new physical asset.
2.Expenditure incurred for upgrading an existing asset to enhance its productive capacity may be treated as capital expenditure.
Which of the statements given above is/are correct?
Answer: B
Notes:
Explanation: Capital expenditure does not always create a new asset; it can also improve or extend the life or capacity of an existing asset.
Source- BL
