Which of the Following Below Is an Example of a Capital

question 84

Multiple Choice

Which of the following below is an example of a capital expenditure?

• A) cleaning the carpet in the front room
• B) tune-up for a company truck
• C) replacing an engine in a company car
• D) replacing all burned-out light bulbs in the factory

---

Definitions:

Current Liabilities

Short-term financial obligations of a company that are due to be paid within one year.

Retained Earnings

The portion of net income which is retained by the corporation rather than distributed to its owners as dividends.

COGS

Cost of Goods Sold (COGS) refers to the direct costs associated with the production of goods sold by a company, including material and labor costs.

Gross Margin

Revenue less cost where cost is spending closely associated with production. Stated in dollars or as a percent of revenue. A fundamental measure of a business’s strength.