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Question
Premium received on issue of shares is a ______.
Options
Capital receipt
Revenue receipt
Deferred revenue receipt
None of these
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Solution
Premium received on issue of shares is a Capital receipt.
Explanation:
Capital raised by an issue of shares and debentures.
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.
Write any two differences between capital and revenue Receipts.
A receipt is a capital receipt:
______ involves creation of liability and is shown on the liabilities side of the balance sheet.
Non-recurring receipts like additional capital, loan, etc. are ______.
Define Capital receipts.
Give two examples of Capital receipts.
Amount received on sale of assets is a ______ receipt.
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.
