WAEC Accounting 2024 Paper

Concept:Capital expenditure is money spent on buying or improving long-term assets that will be used in the business for more than one year.Explanation:From the information given, identify which items are capital expenditures.Purchase of motor van $= \mathrm{D}\,370,000$ is capital expenditure.Building of laboratories $= \mathrm{D}\,760,000$ is capital expenditure.Purchase of drugs, electricity, and repair of equipment are revenue expenditure, so they are excluded.Now add the capital items:$\text{Capital expenditure} = \mathrm{D}\,370,000 + \mathrm{D}\,760,000$$\text{Capital expenditure} = \mathrm{D}\,1,130,000$Answer:B. $\mathrm{D}\,1,130,000$