Asked by Brendan Aikin on Jun 29, 2024
Verified
Capital expenditures are costs that are charged to stockholders' equity accounts.
Capital Expenditures
Capital invested by a business to purchase or improve tangible assets, like real estate, factories, or machinery.
Stockholders' Equity
Represents the owners' claims on the assets of a corporation, calculated as total assets minus total liabilities.
- Differentiate between capital expenditures and revenue expenditures within the framework of fixed assets.
Verified Answer
JA
Johana AguirreJul 04, 2024
Final Answer :
False
Explanation :
Capital expenditures are costs associated with acquiring or improving long-term assets such as buildings, equipment, or land. These costs are not charged to stockholders' equity accounts but are instead recorded as assets on the balance sheet and depreciated over their useful lives.
Learning Objectives
- Differentiate between capital expenditures and revenue expenditures within the framework of fixed assets.