Chapter Three- Purchase of Non-Current Assets

Question 1

Capital Expenditure

Answer 1

Expenditure which results in the acquisition, replacement or improvement of non-current assets

Question 2

Capitalisation Policy

Answer 2

The business’ policy for determining when expenditure on non-current assets is capitalised

Question 3

Capitalised

Answer 3

Including the cost of a non-current asset in the statemnet of financial position

Question 4

Loan

Answer 4

A fixed amount borrowed from a bank or other provider which is to be repaid over an agreed period of time on which interest is paid on the outstanding amount

Question 5

Non-Current Asset

Answer 5

Assets acquired for long-term use within the business

Question 6

Property, Plant and Equipment

Answer 6

Tangible items that are held for use in the production or supply of goods and/or services or for administrative purposes and are expected to be used in more than one financial period

Question 7

Revenue Expenditure

Answer 7

Any expenditure for the trade of the business or to repair, maintain and service non-current assets