Advertisements
Advertisements
Question
Distinguish between Capital Receipts and Revenue Receipts.
Distinguish Between
Advertisements
Solution
| 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. |
shaalaa.com
Distinction Between Capital and Revenue Receipts
Is there an error in this question or solution?
RELATED QUESTIONS
Distinguish between capital receipt and revenue receipt.
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.
Fees and commission received for services rendered, interest and dividend received an investment are examples of ______.
A receipt is a capital receipt:
______ involves creation of liability and is shown on the liabilities side of the balance sheet.
Define Capital receipts.
What are revenue receipts?
Give three examples of Revenue receipts.
Amount received on sale of assets is a ______ receipt.
Compensation received for the surrender of a right is a revenue receipt.
