Question

Given the following list of​ outlays, indicate whether each is normally considered a capital expenditure or an operating expenditure.

a. An outlay of ​$27,200 for a marketing research report.

b. A ​$300 outlay for an office machine.

c. An outlay of ​$1,758,000 to purchase copyrights from an author.

d. A $180,000 investment in a portfolio of marketable securities.

e. An outlay of ​$3,100,000 for a major research and development program.

f. An outlay of ​$3,500 for a new machine tool.

g. An outlay of ​$3,457,000 for a new building.

h. An initial lease payment of ​$12,600 for electronic​ point-of-sale cash register systems.

Answer 1

Transactions	Type of Expenditure
a. An outlay of ​$27,200 for a marketing research report.	Capital Expenditure
b. A ​$300 outlay for an office machine.	Operating Expenditure
c. An outlay of ​$1,758,000 to purchase copyrights from an author.	Capital Expenditure
d. A $180,000 investment in a portfolio of marketable securities.	Capital Expenditure
e. An outlay of ​$3,100,000 for a major research and development program.	Capital Expenditure
f. An outlay of ​$3,500 for a new machine tool.	Operating Expenditure
g. An outlay of ​$3,457,000 for a new building.	Capital Expenditure
h. An initial lease payment of ​$12,600 for electronic​ point-of-sale cash register systems.	Operating Expenditure