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What is the difference between capital and non-capital purchases?


What is the difference between capital and non-capital purchases?

From economist.com
Capital
"Economists describe capital as one of the four essential ingredients of economic activity, the FACTORS OF PRODUCTION, along with LAND, LABOUR and ENTERPRISE."

This means that capital purchase buy things that can contribute to increasing production (such as factories, more trucks, more computers etc)

Non capital puchases would be anything else that doesn't increase production such as paying off debt. Source(s): http://www.economist.com/research/econom...
Besides the first answer; it can also contribute to how the asset is taxed.
It depends upon ur business.

Say,u r dealing in the business of printing machinery then it is a non capital purchase for u , at the same time it may be capital purchase for book publisher.
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