Question

Revenue receipts in the government’s budget ______.

Options

• create liability

• reduce liability and create assets

• reduce assets

• keep liability and assets unaltered

Answer 1

Revenue receipts in the government’s budget keep liability and assets unaltered.

Explanation:

Revenue receipts do not create a repayment liability or reduce the government’s assets, unlike capital receipts. Option 4 is the intended choice; more precisely, revenue receipts leave liabilities unchanged and do not cause a reduction in assets.