The purchase of furniture is a capital expenditure.
Capital expenditures are expenses that are incurred by a business for acquiring or improving long-term assets, such as buildings, equipment, or furniture, that will be used by the business for more than one accounting period. These expenses are not immediately charged against the company's revenue but are instead capitalized, meaning they are recorded as assets on the company's balance sheet and gradually expensed over their useful lives through a process called depreciation.
The purchase of furniture is a capital expenditure because it is an expense incurred by the business for acquiring a long-term asset that will be used by the business for more than one accounting period. The furniture will be recorded as an asset on the balance sheet and gradually expensed over its useful life through depreciation.
In contrast, expenses like salaries and wages, stationery, and repairs of a motor vehicle are considered revenue expenditures because they are incurred for the purpose of generating revenue in the current accounting period and are expensed immediately.
In summary, the purchase of furniture is a capital expenditure because it is an expense incurred for acquiring a long-term asset that will be used by the business for more than one accounting period, while expenses like salaries and wages, stationery, and repairs of a motor vehicle are revenue expenditures because they are expensed immediately and incurred for the purpose of generating revenue in the current accounting period.