Question

Distinguish between Capital Receipts and Revenue Receipts.

Answer 1

Basis	Capital Receipts	Revenue Receipts
Meaning	Capital Receipts refer to the income that arises from financial activities and investments of the business.	Revenue Receipts refer to the income that arises from regular operating activities of a business.
Purpose	Increase in the long-term financial position of the organisation	Covering operational expenses and generating profits.
Nature	Transactions affecting the capital or net worth of the organisation.	Regular income is generated from day-to-day operations.
Source	Sale of assets, borrowings, equity investments, and grants for capital purposes.	Sale of goods/services, interest, dividends, fees, etc.
Examples	Proceeds from sale of land, long-term loans, issuance of shares and government grounds for capital government grounds for capital.	Sale revenue, interest income, rental income, dividends received and service fees.