Amount spent on increasing the seating capacity of a cinema hall is called

The correct answer is Capital Expenditure

Key Points

• Capital expenditure is the amount spent on investment in the business
• The benefit of this type of expenditure is available for longer periods.
• This type of expenditure is non recurring and improves earning capacity of the business
• Capital expenditure is shown on the asset side of the Balance Sheet.
• For example - purchase of fixed assets like land, building, plant and machinery etc.

Important Points

The amount spent on increasing the seating capacity of a cinema hall is non recurring in nature and improves  earning capacity of the business hence it is a capital expenditure.