Question

Short answer type questions:
Distinguish between 'revenue receipt' and 'capital receipt' and give two examples of each.

Answer 1

Revenue receipts are those money receipts which do not create any corresponding liabilities or cause any reduction in the assets of the government. Example: tax and receipts of the government when it sells it shares of companies.

Capital receipts refers to those money receipts which either create a liability for the government or cause reduction in assets of the government.Thus, borrowings and other liabilities and recovery of loan are included in capital receipts.