Which of the following would be considered a non-current asset for capital expenditure?

• A. Short-term investments.
• B. Solar panels used for energy production.
• C. Wages payable.
• D. Raw materials inventory.

Answer: (B)

In capital expenditure and asset accounting, non-current assets are those expected to provide benefits for more than one year. Capex refers to spending on acquiring or upgrading these long-term assets, which are then capitalized on the balance sheet and depreciated over their useful life.

Solar panels used for energy production fit this description. They are tangible fixed assets that will be used in operations for many years, so their cost is capitalized as property, plant and equipment rather than expensed immediately. They generate ongoing utility and value beyond a single year, which is exactly what CapEx targets.

Short-term investments are current assets intended to be converted to cash within a year, wages payable is a current liability, and raw materials inventory is a current asset used in day-to-day production. These do not meet the long-term asset criterion for capital expenditure.