What typically accompanies a capital expense?

Study for the BOMA Foundations Exam. Enhance your skills with flashcards and multiple choice questions. Each question comes with hints and explanations to help you get confident for your test!

A capital expense is generally related to significant expenditures made to acquire, improve, or extend the useful life of a long-term asset. These expenses are typically associated with investments that provide benefits over an extended period, as opposed to regular operational costs or routine maintenance.

When a business incurs a capital expense, it is usually investing in assets such as buildings, equipment, or machinery that will be utilized for many years. This investment is expected to contribute to the company's operational capacity and efficiency, and it affects the financial statements by creating a capital asset that will be depreciated over time, rather than being expensed in the period in which it is incurred.

The other options relate more to day-to-day operational costs or short-lived expenditures, which do not align with the nature of capital expenses. Regular maintenance costs are typically ongoing and necessary for the upkeep of assets, while routine operational costs cover regular business activities and short-term repairs deal with immediate fixes that do not significantly alter the asset's value or extend its life.

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