"No, that is a tea spoon."
Translation:Hayır, o bir çay kaşığı.
The distinctions can often be blurred, but it's about rough distance...
"şu" is closer- some people say closer to the listener than the speaker, while others say anywhere within eyesight that isn't close enough for "bu".
"o" is far from both the speaker and listener (some people specify out of eyesight, but not everyone), or it's an abstract idea that can't be seen at all (ex. O iyi bir fikir = That is a good idea)