Question

State whether the following statements are True or False.

All receipts are the items of revenue income.

Answer 1

False

Explanation: Receipts can be of capital or revenue nature. Both types of receipts are recorded on the receipt side, i.e. the debit side of the Receipts and Payments Account. However, while revenue receipts are recorded in Income and Expenditure Account, all capital receipts are shown in the Balance Sheet. For example, life membership fees, endowment fund, specific donations and legacies are capital receipts, whereas general donations and miscellaneous receipts are revenue receipts.