Concept explainers
Capital Assets: Capital assets are the assets to be held for business purpose for longer maturities with the intention of not to sale them in future, but to generate revenue through them such as property, plant, and equipment etc.
Capital Investments: Capital investments are the amount spends to generate capital assets with the intention to use them for longer duration and not to sell them in near future.
Capital Budgeting: Capital budgeting is the process to determine the large investment on new projects and to determine whether an investment is worthy enough for new projects or in other words if a project can generate sufficient revenue on its investment.
To indicate: The difference between capital assets, capital investments, and capital budgeting.
Want to see the full answer?
Check out a sample textbook solutionChapter 26 Solutions
Horngren's Accounting, The Financial Chapters, Student Value Edition (11th Edition)
- How much would you expect quarterly net operating income to increase?arrow_forwardAcp Distributors purchased a cooling system for its storage warehouse at a cost of $92,500. The cooling system has an estimated residual value of $7,000 and an estimated useful life of 10 years. What is the amount of the annual depreciation computed by the straight-line method?arrow_forwardNonearrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education