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Accountancy - Capital and revenue receipts | 11th Accountancy : Capital and Revenue Transactions

Chapter: 11th Accountancy : Capital and Revenue Transactions

Capital and revenue receipts

Receipt which is not revenue in nature is called capital receipt.

Capital and revenue receipts

 

1. Capital receipt

Receipt which is not revenue in nature is called capital receipt. It is non-recurring in nature. The amount received is normally substantial. It is shown on the liabilities side of the balance sheet.

Examples

·           Proceeds from issue of shares and debentures

 

·           Long term loan raised from bank and other financial institutions

 

·           Proceeds of sale of fixed assets

 

·           Proceeds of sale of long-term investments

 

·           Receipt of special donations

 

2. Revenue receipt

Receipts which are obtained in the normal course of business are called revenue receipts. It is recurring in nature. The amount received is generally small.

Examples

·           Proceeds from sale of goods

 

·           Interest on investments received

 

·           Rent received

 

·           Dividend from investment in shares.

 







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