What type of expenditure involves spending on items that will last for more than a year?

Capital expenditure refers to spending on items that are intended to be used for more than one year. This type of expenditure is typically associated with the purchase of fixed assets such as machinery, buildings, or vehicles that provide lasting benefits to a company or individual.

Investments made as capital expenditure are usually significant and play a crucial role in the long-term operational capacity of a business or in the enhancement of personal assets. For example, purchasing a vehicle for a business would be considered capital expenditure because it is expected to contribute to the business's operation over many years.

In contrast, operating expenditure involves ongoing costs necessary for the day-to-day functioning of a business, including rent, utilities, and salaries, which do not create long-term value. Revenue expenditure is often synonymous with operating expenditure and refers to expenses that are expected to be short-term in nature, being consumed or used within the accounting period. Variable expenditure pertains to costs that fluctuate with the level of output or sales and can include elements of both operating and revenue expenditures, rather than long-term investments like capital expenditure.