Question

While preparing cash book/account no distinction is made between?

• A. Revenue and capital receipts
• B. Revenue and capital payments
• C. Both A and B
• D. Neither A nor B

Answer 1

The correct option is C Both A and B

Cash is a real account. Hence there is no distinction made while receiving the cash for revenue and capital receipt. No distinction is made for giving a credit to the receipt for revenue or capital receipt.

Irrespective of the nature of receipt, cash account is always debited by giving a credit to the respective receipt i.e. revenue or capital receipts.