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Question
A receipt is a capital receipt because ______.
Options
The amount involved is large.
The amount is received in lump sum.
The amount relates to fixed assets.
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Solution
A receipt is a capital receipt because the amount relates to fixed assets.
Explanation:
Capital receipts involve creation of a liability or reduction in the value of fixed assets.
RELATED QUESTIONS
Write any two differences between capital and revenue Receipts.
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Rent received and commission received are examples of ______.
______ involves creation of liability and is shown on the liabilities side of the balance sheet.
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Give three examples of Revenue receipts.
Amount obtained from a customer previously written off as bad debt is a ______ receipt.
A receipt in substitution of an income is revenue receipt.
Any lump sum receipt is always a capital receipt.
