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Question
Amount received on sale of assets is a ______ receipt.
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Solution
Amount received on sale of assets is a capital receipt.
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Distinction Between Capital and Revenue Receipts
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Chapter 6: Capital and Revenue Expenditure/Income - EXERCISES [Page 82]
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RELATED QUESTIONS
Distinguish between capital receipt and revenue receipt.
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
Money received by sale of machine is a ______.
A receipt is a capital receipt:
Define Capital receipts.
Amount received on sale of stock-in-trade is a ______ receipt.
A receipt is a capital receipt because ______.
A receipt in substitution of an income is revenue receipt.
Compensation received for the surrender of a right is a revenue receipt.
