Sale of securities by an investment company is a capital receipt.

MCQ

True or False

This statement is False.

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Distinction Between Capital and Revenue Receipts

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Chapter 6 Capital and Revenue Expenditure/Income
EXERCISES | Q 5. (xi) | Page 84

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.

Capital receipts are usually obtained in case of a company:

A receipt is a capital receipt:

______ involves creation of liability and is shown on the liabilities side of the balance sheet.

Define Capital receipts.

Distinguish between Capital Receipts and Revenue Receipts.

Amount received on sale of stock-in-trade is a ______ receipt.

Premium paid on issue of shares is a capital receipt.

A receipt in substitution of an income is revenue receipt.