Advertisements
Advertisements
Questions
Define Capital receipts.
What is meant by capital receipts?
Advertisements
Solution
- Capital receipts result from the sale of a capital asset and refer to amounts received from proprietors in the form of capital or loans.
- Capital receipts are an item on the balance sheet, not the profit and loss account.
Notes
Students should refer to the answer according to their questions.
APPEARS IN
RELATED QUESTIONS
Distinguish between capital and revenue expenditure and state whether the following statements are items of capital or revenue expenditure:
- Expenditure incurred on repairs and whitewashing at the time of purchase of an old building in order to make it usable.
- Expenditure incurred to provide one more exit in a cinema hall in compliance with a government order.
- Registration fees paid at the time of purchase of a building.
- Expenditure incurred in the maintenance of a tea garden which will produce tea after four years.
- Depreciation charged on a plant.
- The expenditure incurred in erecting a platform on which a machine will be fixed.
- Advertising expenditure, the benefits of which will last for four years.
Money received by sale of machine is a ______.
______ involves creation of liability and is shown on the liabilities side of the balance sheet.
Give three examples of Revenue receipts.
What do you understand by Turnover?
Distinguish between Capital Receipts and Revenue Receipts.
Amount received on sale of stock-in-trade is a ______ receipt.
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.
