70.5k views
2 votes
Which of the following is a capital expenditure?

a. Payment of an account payable
b. Retirement of bonds payable
c. Payment of income taxes
d. None of these answer choices are correct

User Adelle
by
7.9k points

1 Answer

3 votes

Final answer:

Retirement of bonds payable is a capital expenditure.

Step-by-step explanation:

A capital expenditure refers to a long-term investment made by a company to acquire or improve its fixed assets, such as buildings, equipment, or vehicles, that will benefit the business over a longer period of time.

Among the given options, the only choice that represents a capital expenditure is b. Retirement of bonds payable. This is because retiring bonds payable involves the repayment of a long-term debt obligation, which is considered a capital expenditure.

User Farahmand
by
7.6k points