Question

Distinguish between Capital and Revenue Receipt ?​

Answer 1

Answer:

Receipts are just the opposites of expenses. But without receipts, there may be no existence of the business. Not all receipts directly increase the profits or decrease the loss. But some affect the profit or loss directly.

In this article, we will be talking about capital receipts and revenue receipts. In simple terms, capital receipts don’t affect the profit or loss of the business; for example, we can say that the sale of long-term assets is one sort of capital receipts.

But revenue receipts affect the profit or loss of a company. As an example, we can say that the sale of products, the commission received, etc. are revenue receipts.

Capital-Receipts-vs-Revenue-Receipts

The nature and function of capital receipts and revenue receipts are completely different. In this article, we will do a comparative analysis of capital receipts vs. revenue receipts.

Answer 2

BASIS FOR COMPARISON CAPITAL RECEIPT REVENUE RECEIPT

Meaning Capital Receipts are the income generated from investment and financing activities of the business. Revenue Receipts are the income generated from the operating activities of the business.

Nature Non-Recurring Recurring

Term Long Term Short Term

Shown in Balance Sheet Income Statement

Received in exchange of Source of income Income

Value of asset or liability Decreases the value of asset or increases the value of liability. Increases or decreases the value of asset or liability.

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