Which of the following is considered under Capital receipts? • Receip
A. Expenses paid in advance
B. Amount received on sales of good
C. Amount received on sales of fixed assets
D. Advertisement expenses
Right Answer is: C
• Receipt– It is the amount of income generated by an organisation during the course of the audit. Types of receipts are Capital receipts & Revenue receipts.
• Capital receipts: these are non-recurring receipts that reduce financial assets or create liabilities. They also refer to incoming cash flows. Capital receipts can be both non-debt and debt receipts.
• Revenue receipts: This is the money received by a business organisation as a result of its normal business operations. In this way, revenue receipts affect the profit or loss of a business.