{"id":55834,"date":"2024-04-16T00:34:12","date_gmt":"2024-04-16T00:34:12","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=55834"},"modified":"2024-04-16T00:34:12","modified_gmt":"2024-04-16T00:34:12","slug":"statement-i-capital-expenditure-benefits-the-current-accounting-period-statement-ii-capital-expenditure-will-also-benefit-the-next-accounting-period","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/statement-i-capital-expenditure-benefits-the-current-accounting-period-statement-ii-capital-expenditure-will-also-benefit-the-next-accounting-period\/","title":{"rendered":"Statement I Capital expenditure benefits the current accounting period. Statement II Capital expenditure will also benefit the next accounting period."},"content":{"rendered":"

[amp_mcq option1=”Both statements are correct” option2=”Both statements are incorrect” option3=”Statement I is correct, but statement II is incorrect” option4=”Statement I is incorrect, but statement II is correct” correct=”option3″]<\/p>\n

The correct answer is: Statement I is correct, but statement II is incorrect.<\/p>\n

Capital expenditure is the cost of acquiring or improving long-term assets. These assets are expected to provide benefits for more than one accounting period. Therefore, statement I is correct.<\/p>\n

However, capital expenditure does not necessarily benefit the current accounting period. In some cases, the benefits of capital expenditure may not be realized until future periods. For example, a company may purchase a new piece of equipment that will increase production in future periods. The cost of the equipment would be considered capital expenditure, and the benefits of the equipment would not be realized until future periods.<\/p>\n

Therefore, statement II is incorrect.<\/p>\n","protected":false},"excerpt":{"rendered":"

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