Question

Which of the following is a component of the capital budget?

• A. Capital receipts
• B. Revenue expenditure
• C. Capital expenditure
• D. Both A & C

Answer 1

The correct option is D Both A & C

Capital budget are the money receipts or payments that lead to decrease or increase in the value of asset and liability of the government. It is divided into two heads

1. Capital receipts- Capital receipts are all those money receipts of the government that either creates a liability for the government or reduce an asset of the government.

2. Capital expenditure - Capital expenditure are all those expenditure of the government that either creates an asset for the government or reduce the liability of the government. For example - Expenditure on land and building, purchase of shares etc.