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Question
State whether the following statement is True or False.
All receipts are the items of revenue income.
Options
True
False
Solution
False
Explanation: Receipts can be of capital or revenue nature. Both types of receipts are recorded on the receipt side, i.e. the debit side of the Receipts and Payments Account. However, while revenue receipts are recorded in Income and Expenditure Account, all capital receipts are shown in the Balance Sheet. For example, life membership fees, endowment fund, specific donations and legacies are capital receipts, whereas general donations and miscellaneous receipts are revenue receipts.
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RELATED QUESTIONS
What are the features of Receipt and Payment Account?
Distinguish between and 'Income and Expenditure Account' and 'Receipts and Payments Account' on the following basis:
- Nature
- Depreciation
From the following particulars taken from the Cash Book of a health club, prepare a Receipts and Payments Account.
| Particulars | Rs |
| Opening balance: | |
| Cash in Hand | 5000 |
| Cash at Bank | 25000 |
| Subscriptions | 165000 |
| Donations | 35000 |
| Investment Purchased | 80000 |
| Rent Paid | 20000 |
| General Expenses | 21500 |
| Postage and stationery | 2000 |
| Courier charges | 1000 |
| Sundry Expenses | 2500 |
| Closing Cash in Hand | 12000 |
Write a word / term / phrase which can substitute of the following statement.
The fees paid by a person who wants to become a life member of the concern, for his whole life.
