Question

In accounts, amount spent to increase earning capacity is

Answer 1

The amount spent to increase earning capacity is called as "capital expenditure" ..Eg: additions made to the machinery,building etc...all these improve the earning capacity and capital expenditure will not be incurred very frequently...it just incurrs once in a while... say 5yrs,10 yrs..the expenses should be capitalised in the books of accounts..

Answer 2

Amount of money spent on either buying fixed assets or improving the earning capacity of these assets. Moreover, any expenditure which is incurred for the purpose of increasing profit earning capacity .