Computer and software purchases are capital expenditures, even though the expected useful lifetime of computer hardware and software has decreased in recent years because of rapid technological change.

Question

Quizplus · Accepted Answer

Capital expenditures are purchases of long-term assets used in the business, regardless of the expected useful lifetime. Even though computer hardware and software have shorter lifetimes due to technological change, they are still considered capital expenditures because they are necessary for the business to function and produce income.

Computer and Software Purchases Are Capital Expenditures, Even Though the Expected