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Questions
Distinguish between capital receipt and revenue receipt.
Distinguish, with the help of example between Capital Receipts and Revenue Receipts.
Solution
| Basis | Capital receipt | Revenue receipt |
| Meaning | Capital receipts are the income created by a business's investment and financing activities. | Revenue Receipts refer to the income earned from commercial operations. |
| Nature | Non-recurring in nature. | Recurring in nature. |
| Size | Amount is generally substantial. | Amount is generally smaller. |
| Distribution | These amounts are not available for distribution as profits. | The excess of revenue receipts over the revenue expenses can be used for distribution as profits. |
| Term | Long term | Short term |
Notes
Students should refer to the answer according to their questions.
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