What type of expense includes large purchases of durable items like exercise equipment?

The correct answer is that large purchases of durable items, such as exercise equipment, are classified as capital expenses. Capital expenses, or capital expenditures, refer to significant investments made in assets that provide value over a long period. Such items are not only essential for the functionality and operation of a business or fitness facility but also contribute to its long-term growth and sustainability.

When a facility invests in durable items like exercise machines, these purchases are capitalized on the balance sheet instead of being expensed immediately on the income statement. This capitalization means that the cost is spread out over the useful life of the equipment, often through depreciation. This approach is in line with accounting principles that match costs with revenues over time, reflecting the ongoing use of the asset in generating income.

In contrast, other types of expenses do not fit this category. Fixed expenses are ongoing costs that do not fluctuate with production levels, while variable expenses change based on the volume of services delivered. Non-capital expenses would refer to routine operating costs that are fully expensed in the period they occur, such as supplies or wages, which do not result in long-term benefits. Therefore, capital expense accurately reflects the nature of large purchases like exercise equipment, accounting for their significance and longevity in business operations.