Question

Which of the following is NOT an example of capital expenditure incurred by the government?

• A. Expenditure on maintenance of a government school building
• B. Repayment of loans by the government
• C. Expenditure on construction of a new hospital
• D. Loans given by the government

Answer 1

Answer: (A)

Expenditure on maintenance of a government school building

Answer 2

Capital expenditure refers to spending on the acquisition or creation of assets (such as building a new hospital) or repayment of liabilities (such as loan repayments). Maintenance costs, on the other hand, are classified as revenue expenditure, as they are recurring and do not create new assets or reduce liabilities.