Non recurring receipts like additional capital loan etc are
Answers
no n re c urrin g re ce I p t s like. addi ti on a l
Answer:
Capital Receipt
These have a nature of non-recurrence, besides that, they are situated in the balance sheet in the liabilities portion of them. The capital receipt is always in the interchange for the income. The capital receipt is a kind of cash-flow in the business that does not occur over and over again and this eventually, leads to the creation of liabilities in the future and also, the decrement of assets takes place in the future.
All of the capital receipts are free from taxation unless there is a provision to tax it. Various types of Gifts and loans are the types of the capital receipts that do not attract tax and are tax-free. So, in addition to non-recurring, Capital receipts are those non-routine receipts which either becomes a load and responsibility or cause a vivid depletion in the assets of the government or any organization and business.
Revenue Receipt
These receipts are a major source of income for any kind of a business and without it, a business can’t survive for long. This is a result of the normal and core business activities. Being a normal business result is the reason for its recurring nature. However, there is a little shortcoming associated with it. The benefits of revenue receipts are enjoyable only for the current accounting year and not possibly after that.
The income received from the daily and periodic activities of business includes all the operations that indulge cash into the business like:
The sale of any kind of an inventory
Income from services rendered
Different types of discount Received from the suppliers
Sale of scrap
Interest received.
Rent received
To sum it all, Revenue receipts are recurring receipts and their effect is shown on the income statement. For a successful business, both receipts play a prominent role as they both compliments each other.
Explanation: