difference between revenue receipts and capital receipt with example

Capital Receipts appears on the liabilities side of the Balance Sheet whereas Revenue Receipts appears on the credit side of the Profit and Loss Account as income for the financial year. The capital receipt is received in exchange for the source of income. Unlike revenue received which is a substitution of income.

1. What is the difference between capital receipts and revenue receipts?
2. What is revenue receipt with example?
3. What are examples of capital receipts?
4. What is meant by revenue receipts and capital receipts in a government budget give one example of each?
5. What are the two types of revenue receipts?
6. Is entrance fee a capital receipt?
7. What are the sources of revenue receipts?
8. What is the difference between receipts and revenue?
9. Which is not a revenue receipt?
10. What are the main items of capital receipt?
11. Which transaction is capital receipt?
12. Is a capital receipt taxable?

What is the difference between capital receipts and revenue receipts?

The primary difference between Capital Receipts vs Revenue Receipts is that Capital receipts are the receipts of non-recurring nature which either creates the liability of the company or reduces the company's assets whereas revenue receipts are the receipts of recurring nature and are reported in the statement of ...

What is revenue receipt with example?

Examples of Revenue Receipts

Some examples of receipts which are of routine nature i.e. revenue receipts in an organization are, Money received for services provided to customers. Rent received. Discount received from suppliers, vendors or creditors.

What are examples of capital receipts?

Other common examples of capital receipts

• Cash received from sale of fixed assets.
• Amount of loan received by the company from a bank.
• Capital invested in the business by a new partner.
• Consideration received by a company through sale of its license to produce a well marketed drug to another company.

What is meant by revenue receipts and capital receipts in a government budget give one example of each?

Government receipts are divided into two groups—Revenue Receipts and Capital Receipts. All Government receipts which either create liability or reduce assets are treated as capital receipts whereas receipts which neither create liability nor reduce assets of Government are called revenue receipts.

What are the two types of revenue receipts?

For the government, there are two sources of revenue receipts — tax revenues and non-tax revenues.

Is entrance fee a capital receipt?

CIT [1961] 41 ITR 495, the entrance fees received from the members are not capital receipts but revenue receipts and are taxable as income of the assessee-club.

What are the sources of revenue receipts?

Revenue receipts are current income receipts from all sources. The main forms of such receipts are taxes, profits of public enterprises, grants, etc. Capital receipts constitute borrowing of the government. There is an important difference between revenue and capital receipts.

What is the difference between receipts and revenue?

The key difference between revenues and receipts is that revenues are reported as sales on the income statement, while receipts increase the cash total on the balance sheet.

Which is not a revenue receipt?

Recovery of loans is not an example of revenue receipts because revenue receipts refer to those money receipts which does not create a liability for the government or cause reduction in assets of the government.

What are the main items of capital receipt?

Capital receipts refer to incoming cash flows (receipts) originating from one of the following three sources:

• Cash from the sale of fixed assets (either tangible or intangible) ...
• Cash from the sale of shares in the business. ...
• Cash from the issuance of a debt instrument.

Which transaction is capital receipt?

In summary, a capital receipt is normally a non-recurring transaction which either increases a liability or decreases an asset, and is dealt with on the balance sheet of the business.

Is a capital receipt taxable?

"It is well settled that capital receipts do not come within the ambit of the Income Tax Act except to the extent of any capital receipt being expressly sought to be covered by the Act of the Parliament".