Question: What Is Difference Between Capital Receipt And Revenue Receipt?

Is investment a revenue receipt?

Receipts generated from investing and financing activities are capital receipts, on the other hand, receipts from operating activities are revenue receipt.

Capital Receipts do not frequently occur, as it is non-recurring and irregular.

But, revenue receipts occur again and again, i.e.

they are recurring and regular..

What is revenue receipt example?

Common examples of revenue receipts Income received as interest on a saving account. Dividend income received from shares of various companies. Rental income received by a company. Cash discount received from vendors.

What are the two sources of capital receipts?

3 Main Sources of Capital Receipts The sale of shares in the business, including both common and preferred stock. (Learn more about issuing shares for your business.) The issuing of debt instruments to your business, such as a bank loan. (Read up on good debt vs bad debt.)

Which of the following is capital receipt?

The main items of capital receipts are loans raised by Government from public which are called Market Loans, borrowings by Government from Reserve Bank and other parties through sale of Treasury Bills, loans received from foreign Governments and bodies and recoveries of loans granted by Central Government to State and …

Which transaction is a 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.

What is capital receipts and revenue receipt?

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 sources of revenue receipts?

Non-tax revenue consists of all receipts from sources other than taxes as shown in that chart.Components or sources of revenue receipts are explained below: … It comprises the following items:(i) Interest: … (ii) Profits and Dividends: … (iii) Fees and Fines: … (iv) Special Assessment: … These are the following:

Why tax is not a capital receipt?

Taxes received by government are not capital receipts because they neither create any liability nor cause a reduction in the assets of the government.

What are revenue receipts?

Revenue receipts can be defined as those receipts which neither create any liability nor cause any reduction in the assets of the government. … For example, taxes received by the government, unlike borrowings, do not create any liabilities for it.

What 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 is capital transaction?

Transactions relating to share capital and reserves, long-term debt capital, or fixed assets of a company, as opposed to revenue transactions. For example, the purchase of a building is a capital transaction, while the maintenance of a building is a revenue transaction.

What is capital receipt example?

Examples of debt capital receipts: Market loans, issuance of special securities to public-sector banks, issue of securities, short-term borrowings, treasury bills, securities against small savings, state provident funds, relief bonds, saving bonds, gold bonds, external debt, etc, are all example of debt capital …

What are the two types of revenue receipts?

On this basis, revenue receipts are of two types viz. Tax Revenue and Non-tax revenue….Non-Tax RevenueMoney which the Government earns as “Dividends and profits” from its profit making public enterprises (PSUs).Interest which the Government earns on the money lent by it to external or internal borrowers.More items…•

Is entrance fee a revenue receipt?

Entrance Fees or Admission Fees is the amount that a person pays at the time of becoming a member of a Not-for-Profit Organization. It is a revenue receipt. Therefore, we account it as an income and credit it to Income and Expenditure Account.

Is subscription a capital receipt?

A capital receipt tends to be of a non-continuing nature. Thus, the sale of a fixed asset or shares in a business arises on only an occasional basis. One exception is when shares are sold on an ongoing subscription basis. … Thus, they do not arise from the operating activities of a business.