Amount realized by the sale of fixed assets or by issue of shares or debentures is a _ while amount realized by sale of goods or rendering services is always _.

Revenue receipts, Capital receipt

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Capital receipt, Revenue receipts

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Capital receipt, Capital receipt

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Revenue receipts, Revenue receipts

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Solution

The correct option is C Capital receipt, Revenue receipts
An amount received on account of sale of trading goods or receipts in respect of circulating capital or of flowing capital is revenue receipt, for example sale of a motor car by a dealer. On the other hand a receipt on account of sale of fixed assets is a capital receipt, for example, amount received on sale of a motor car by a person who is not a car dealer.

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Receipts and Payments A/c is a summary of -

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Categorise the following government receipts into revenue and capital receipts. Give reasons for your answer.

(i) Receipt from sale of shares of a public sector undertaking.

(ii) Borrowing from public.

(iii) Profit of public sector undertakings.

(iv) Income tax received by government.

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