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Question
Give two examples of Capital receipts.
Answer in Brief
Solution
- Amount received by way of loans.
- Capital raised by an issue of shares and debentures.
- Amount received from the sale of investments and fixed assets.
- Life subscriptions and entrance fees received by a club of association from its members.
- Government grants and endowments.
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Distinction Between Capital and Revenue Receipts
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RELATED QUESTIONS
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.
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