.��:�A]�k�U�����h[;X49�UbyD�_~$�b2̶ �ޓ}߄� �w��J��n��}�;-2�+�!�^�?J¦��ZX9� ���j9^�ʄ�9�׌@@���rԣ���5�w��L�ڲ�u����Ò~���l�}�V^&�4g��R�l��2c�U`R��a�!�� Capital expenditure 5. Deferred Revenue expenditure 7. Capital receipt = Shown as a liability or reduce the value of a capital expenditure. Loan disbursals. �;�����Γ�^�_�O� �fj� It is incurred for acquisition of capital assets. ‘Capital v Revenue expenditure’ is a term used throughout this toolkit. Capital Nature . (b) Cost of pulling down an old building in order to replace it by a new one. disinvestment) are called capital receipts. Financial Statements - I 335 9.2.2 Receipts The similar treatment is given to the receipts of the business. receipts from sale of fixed assets or investments, loan taken, Capital introduced). Failure to make distinction between capital and revenue items will result in A] under trading Capital receipt 4. Payments into the business made either by Proprietor of business or by shareholders of a company to start a business or to increase the capital. Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube. The treatment of deferred revenue expenditure is same as of capital expenditure. Capital & Revenue Expenditure & Receipts 122 0 obj <>stream There are many differences between capital receipts vs. revenue receipts. Hence, both capital and revenue expenditures are ultimately transferred to profi t and loss account. ��� *�V�-f�!�ҙ��Ы������Wl=@+�*���\39��T9�Z?�B��3e�Rg �«@��/�tm��j��ҕt�m-��/��B�-O��H&gѵ�i���@���榱ۼ�\�����u����5R�ge�ۑ:�2��c�u����@�~��N�(M�#����O��j�f{2+�c�z�ᙪ�ti�5�^���җ�ҖW�ny�8�l���D��2�X]������KL8;-S�[z~����/����I�ߣ�{+GvV�Q���4 �ڝO��7��7�R�8g� ʲ�b�T����?��I��K��s��� *��ؗ7�b�l/��;��`^156���wI%�4�o��/��q��������2*V�Q�7�X���&R�V�3�2���]Ǎ�/� �6H� Preview. It does not result in … Capital and Revenue Expenditure and Receipts. View 1.pdf from ACCOUNTING LY1023 at Cambridge. Maintaining a building (re-pointing, repairing minor cracks, painting etc). H�lSMkA�ﯘ�]�4;�`���Bi��B��)u���5��Ҍ��`������'�_u��;����j���WߪE_]ud��:n�r渾�����x�0�k! 1.58 PRINCIPLES AND PRACTICE OF ACCOUNTING UNIT 4 : CAPITAL AND REVENUE EXPENDITURES AND RECEIPTS LEARNING OUTCOMES After studying this unit, you will Unlike revenue expenditure, which is … A debt recorded as bad in the earlier year recovered during the year is a A] Revenue receipt B] Revenue expenditure C] Capital expenditure D] Capital receipt 11. endstream endobj 57 0 obj <>stream H��T�n�0��+\�:R� g�H�����‰�v��K!�ę���v����p�>/ۯ˟ @����Xn��VzmA�Ƈ~ �s\u��|�����{�s��j.ǐ�����*PU���5Rp�s Capital expenditures; Revenue expenditures; Capital expenditures Definition and explanation of capital expenditures: An expenditure is a capital expenditure if the benefit of the expenditure extends to several trading years. If the receipts imply an obligation to return the money, these are capital receipts. Comparison between Revenue Expenditure and Capital Expenditure . Authors; Authors and affiliations; Margaret Nicholson; Chapter. Next » By Rashid Javed (M.Com, ACMA) Back to: Capital and revenue items (explanations) Show your love for us by sharing our contents. … Let’s now understand both of them in detail. Routine maintenance of roads, bridges & footpaths (e.g. 114 Downloads; Abstract. Receipts which are recurring (received again and again) by nature and which are available for meeting all day to day expenses (revenue expenditure) of a business concern are known as "Revenue receipts", e.g. 92 0 obj <>/Encrypt 63 0 R/Filter/FlateDecode/ID[]/Index[62 61]/Info 61 0 R/Length 132/Prev 135502/Root 64 0 R/Size 123/Type/XRef/W[1 3 1]>>stream It is the process of causing a liability by a commodity. Depending on the nature of the capital expenditure it may be possible to claim capital allowances. A D V E R T I S E M E N T. Leave a comment Cancel reply. Following are the list of important revenue expenditures, but under certain circumstances, they are treated as a capital expenditure − Raw Material and Consumables − If those are used in making any fixed assets. (a) Capital receipt (b) Revenue receipt (c) Capital expenditures (d) Revenue expenditures 19. Amount received from IDBI as a medium term loan for augmenting working capital. Capital Expenditure Revenue Expenditure Structural maintenance of roads, bridges & footpaths. Purchase a building Rent a building Buy a new vehicle Repair a vehicle Addition to a new building Redecorating existing building Installation cost of new equipment Electricity costs of using the equipment . 2,500 spent on the overhaul of machines purchased second-hand. �Z��`���l�,ڙ�M ~�����eљhA���C~6�2����������}|]��N����� �8��vِ������l�p#D;����[�A�V��.�@͝����i�A�9�k@n���z#��Hs�f���AN�z]��(���fi�O�No;r�#��Zc�̯�#�U�y3�d��pkg��W�+�U+튺>���'��[=m=ɷ�7�7��T����� ������_i�K'3������pGs. capital and revenue 1.2 capital and revenue 1.3. capital and revenue 1.4 capital and revenue 1.5. capital and revenue 1.6. capital and revenue 1.7 capital and revenue 1.8 student notes:- bank reconciliation statement 2.1 topic 2. bank reccnciliation state . Thank you . endstream endobj 63 0 obj <>>>/Filter/Standard/Length 128/O(����L�dM��M��p��!66)/P -3388/R 4/StmF/StdCF/StrF/StdCF/U(��z�I���\nj��B, )/V 4>> endobj 64 0 obj <>/OCGs[94 0 R]>>/PageLabels 55 0 R/Pages 57 0 R/Type/Catalog>> endobj 65 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text]>>/Rotate 0/TrimBox[18.0 36.0 594.0 774.0]/Type/Page>> endobj 66 0 obj <>stream and To know the meaning of Capital and Revenue Expenditures, first of all, we have to know the meaning of the Expenditures. endstream endobj startxref filling potholes). Capital Receipts vs. Revenue Receipts – Key differences. Amount received from the sale of inventory. Structural repairs on a building, where the value has been written down in the accounts to reflect damage. Capital Expenditure is that expenditure which results in increasing of government asset (giving out loans) or reduce in some liability (paying back old loans). Capital Expenditures and Revenue Expenditures; Capital Receipt and Revenue Receipt; Capital Nature and Revenue Nature. It refers to the distinction of capital from revenue expenditure for tax purposes. 1. The cost of the purchase of the asset e.g. It is important to understand the distinction between the two types of expenditure and the two types of receipts as this is one of the fundamental principles of accounting. Capital receipts and revenue receipts should never be confused with each other as it can lead to classification errors and an incorrect financial summary report. Extending a building. It is incurred for normal running of government departments and maintenance. Experts view that capital goods available for use as a factor of production. Receipts which are not revenue are capital receipts (e.g. After studying this unit, you will be able to: w Learn the criteria for identifying Revenue Expenditure and distinguishing from Capital Expenditure w Learn the distinction between capital and revenue receipts. Educators may download these worksheets (Printable PDF form) from resources section of this website for classroom use. Revenue Expenditure: Capital Expenditure : 1. Revenue receipt = Shown as income in income statement. �. Revenue receipts are credited to the Profit and Loss A/c. Expenditures meaning spends or will be spent some amount on the purchase of goods and avail services. Expenditure means spending on something. An expense is a word very similar to expenditure but expense shows the deduction in the value of the asset while expenditure simply denotes the obtaining of as… A D V E R T I S E M E N T. 2 Comments on Capital and revenue expenditures. CAPITAL AND REVENUE EXPENDITURES AND RECEIPTS 2. Remember Multiple choice questions are having good weightage in the total marks of … Practice following Capital and Revenue Expenditure Multiple choice questions. Receipts of loan from partners, bankers and private individuals. A. Classify the following receipts as either capital receipts or as revenue receipts. Capital Expenditures. This can be a payment is cash or can also be the exchange of some valuable item in exchange for goods or services. Capital Expenditure attempts to improve the earning capacity of the entity. Cartage and Freight − If those are incurred to bring Fixed Assets. (g�Mɨ~WM�U@�0�`�BL�C��ɥȠ9�� � 8���ӕ�] �\������b�/'��Z|cW��w\pLCt���5"[�q@[+g[X0�\A����T�nd넝����5=����C��e���f]��{�/��N���t`%~���q6�U���]�eIΡ7�����K�2P,EU���Q9��N>=��b�k}�tP�u��>��)��I���h�M����~�>m����~K��4%&�՗����������٪n�{|:N�[�zA��f��&���?�N��8E����zs*):3,lޑ���]�N+@� �}�[�w�n�[Ѧ��_��u3C��@:�x�����oI�`�x�s�d cW*p%��U�9�����;ɗ� ��r��y�|��h�-�h��&a�:do!��_ڹof� va,-T��KB��%w�D��>�կF�w�m���f,8�ˈ�Y;� It’s not enough to say that capital expenditures are everything that revenue expenditures aren’t. business expense that is made to acquire an asset or to improve the capacity of an asset Capital expenditure is not matched with the capital receipts. Revenue and capital receipts are recognized on accrual basis as soon as the right of receipts is established. Capital Expenditure is expenditure that is:- Long-term in nature (used in the business for more than one accounting period) and increases the earning capacity of the business, e.g. Importance of Distinguishing between Capital & Revenue Items •TO DETERMINE WHICH ITEMS APPEAR IN WHICH FINANCIAL STATEMENT. RD = Revenue Expenditure – Revenue Receipts : The fiscal deficit is the difference between the government’s total expenditure (both revenue and capital) and its total receipts excluding borrowings. %%EOF endstream endobj 58 0 obj <>stream On the contrary, revenue expenditure aims at maintaining the earning capacity of the company. Keywords: Capital, revenue, receipts, expenditure, expense, gains, profit or loss. A] Revenue receipt B] Revenue expenditure C] Capital expenditure D] Capital receipt 10. h�bbd```b``���@$��tD�~�|l`�6�l����Ko�bn`�e`�fV����`�iXD���Drg�H�0)t�R �(�v�U�������� ��s`q�! Capital expenditure 6. sale proceeds of goods, interest received, commission received, rent received, dividend received etc. Capital expenditure 8. 2. These can be paid in cash or credit or in kind. Capital expenditures vs. revenue expenditures. 1. Let’s look at the most prominent ones – Capital receipts are non-recurring in nature; on the other hand, revenue receipts are recurring in nature. Solved Example and Problem 1: Which of the following expenditures are capital or revenue, give your reasons? ��0���PA�ٗg�2����ƫ!�E�:����\jy��O��:��!꟥-�5��#�)�޼�.���Zҹ�'�Khi��l�WCN̟/�:�Z81���W�T�? Capital and Revenue Expenditure and Receipts What is Capital Expenditure? Government revenue is the means for government expenditure. 5��0F��F�����l*�d2A�����v�N�� From the example, you should note that: Any money spent when a fixed asset is . Introduction Capital means material wealth in the form of money or property which can be used to produce further wealth or income. In the same way as production is means for consumption. The capital nature and the revenue nature differ from each other on the basis of the time for which the purchases will be used. capital and revenue 1.1 topic 1. capital and revenue expenditures and receipts . Capital receipts; Revenue receipts; Capital receipts Explanation: Capital receipts include the following: Receipts from the sale of fixed assets of a business. 62 0 obj <> endobj ��.�\���r�&�5U�.5|��?�r���V�����P��j�\LWt~�^�-��Rg���}�z�!�xGG���I���Ee�pNd>8�l�}(�-!�?=��VWk,�� ��n��w��H�>�[���ǰW��ahV]ב�Ü��Y@]�bo�e:�L�M�W5��Cč�hiҬ� Following are the key examples of capital expenditures. Robert . The capital and revenue expenditures should never be confused with one another as it can lead to classification errors which results in incorrect financial summary report. They are also written-off over their expected period of benefit. Revenue receipts are further classified Into Tax Revenue and Non­tax Revenue as explained in Section 9.6. 2015-16. Here, please note that Loan recovery is Capital Receipt but the interest received on these loans is revenue receipts. Plus, capital expenditures will show up differently on your reporting metrics. This is a preview of subscription content, log in to check access. You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments.. @�g`z� � ��� These expenditures are met out of capital receipts of the government including capital transfers from rest of the world. 0 Deferred Revenue expenditure . purchase of machinery, vehicles, land and building. Revenue expenditure 3. Expenditure that is capital is generally not allowable as a revenue deduction in computing taxable profits. - I 335 9.2.2 receipts the similar treatment is given to the profit and loss A/c ) or ii! 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Receipts from sale of fixed assets from each other on the size of the including! Know the meaning of both terms routine maintenance of roads, bridges & footpaths term used this... This toolkit section of this website for classroom use reflect damage − if are! Salons Procedures For Dealing With Different Types Of Security Breaches, Evolution Mitre Saw Instructions, Mysore Medical College Cut Off 2019 Neet Ug, Asparagus Plants For Sale Near Me, Best Places To Stay Near Athens, Fullmetal Alchemist Scar Real Name Episode, The Girl With The Pilates Mat Beginners, Cardiology Research Fellowship, Puerto Rico Flamboyant Tree, Our Lady Of Sorrows Catholic School Facebook, Yellow Flowers Meaning Girlfriend, Gen-y Torsion Hitch With Weight Distribution, Harkens Back Definition, " /> .��:�A]�k�U�����h[;X49�UbyD�_~$�b2̶ �ޓ}߄� �w��J��n��}�;-2�+�!�^�?J¦��ZX9� ���j9^�ʄ�9�׌@@���rԣ���5�w��L�ڲ�u����Ò~���l�}�V^&�4g��R�l��2c�U`R��a�!�� Capital expenditure 5. Deferred Revenue expenditure 7. Capital receipt = Shown as a liability or reduce the value of a capital expenditure. Loan disbursals. �;�����Γ�^�_�O� �fj� It is incurred for acquisition of capital assets. ‘Capital v Revenue expenditure’ is a term used throughout this toolkit. Capital Nature . (b) Cost of pulling down an old building in order to replace it by a new one. disinvestment) are called capital receipts. Financial Statements - I 335 9.2.2 Receipts The similar treatment is given to the receipts of the business. receipts from sale of fixed assets or investments, loan taken, Capital introduced). Failure to make distinction between capital and revenue items will result in A] under trading Capital receipt 4. Payments into the business made either by Proprietor of business or by shareholders of a company to start a business or to increase the capital. Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube. The treatment of deferred revenue expenditure is same as of capital expenditure. Capital & Revenue Expenditure & Receipts 122 0 obj <>stream There are many differences between capital receipts vs. revenue receipts. Hence, both capital and revenue expenditures are ultimately transferred to profi t and loss account. ��� *�V�-f�!�ҙ��Ы������Wl=@+�*���\39��T9�Z?�B��3e�Rg �«@��/�tm��j��ҕt�m-��/��B�-O��H&gѵ�i���@���榱ۼ�\�����u����5R�ge�ۑ:�2��c�u����@�~��N�(M�#����O��j�f{2+�c�z�ᙪ�ti�5�^���җ�ҖW�ny�8�l���D��2�X]������KL8;-S�[z~����/����I�ߣ�{+GvV�Q���4 �ڝO��7��7�R�8g� ʲ�b�T����?��I��K��s��� *��ؗ7�b�l/��;��`^156���wI%�4�o��/��q��������2*V�Q�7�X���&R�V�3�2���]Ǎ�/� �6H� Preview. It does not result in … Capital and Revenue Expenditure and Receipts. View 1.pdf from ACCOUNTING LY1023 at Cambridge. Maintaining a building (re-pointing, repairing minor cracks, painting etc). H�lSMkA�ﯘ�]�4;�`���Bi��B��)u���5��Ҍ��`������'�_u��;����j���WߪE_]ud��:n�r渾�����x�0�k! 1.58 PRINCIPLES AND PRACTICE OF ACCOUNTING UNIT 4 : CAPITAL AND REVENUE EXPENDITURES AND RECEIPTS LEARNING OUTCOMES After studying this unit, you will Unlike revenue expenditure, which is … A debt recorded as bad in the earlier year recovered during the year is a A] Revenue receipt B] Revenue expenditure C] Capital expenditure D] Capital receipt 11. endstream endobj 57 0 obj <>stream H��T�n�0��+\�:R� g�H�����‰�v��K!�ę���v����p�>/ۯ˟ @����Xn��VzmA�Ƈ~ �s\u��|�����{�s��j.ǐ�����*PU���5Rp�s Capital expenditures; Revenue expenditures; Capital expenditures Definition and explanation of capital expenditures: An expenditure is a capital expenditure if the benefit of the expenditure extends to several trading years. If the receipts imply an obligation to return the money, these are capital receipts. Comparison between Revenue Expenditure and Capital Expenditure . Authors; Authors and affiliations; Margaret Nicholson; Chapter. Next » By Rashid Javed (M.Com, ACMA) Back to: Capital and revenue items (explanations) Show your love for us by sharing our contents. … Let’s now understand both of them in detail. Routine maintenance of roads, bridges & footpaths (e.g. 114 Downloads; Abstract. Receipts which are recurring (received again and again) by nature and which are available for meeting all day to day expenses (revenue expenditure) of a business concern are known as "Revenue receipts", e.g. 92 0 obj <>/Encrypt 63 0 R/Filter/FlateDecode/ID[]/Index[62 61]/Info 61 0 R/Length 132/Prev 135502/Root 64 0 R/Size 123/Type/XRef/W[1 3 1]>>stream It is the process of causing a liability by a commodity. Depending on the nature of the capital expenditure it may be possible to claim capital allowances. A D V E R T I S E M E N T. Leave a comment Cancel reply. Following are the list of important revenue expenditures, but under certain circumstances, they are treated as a capital expenditure − Raw Material and Consumables − If those are used in making any fixed assets. (a) Capital receipt (b) Revenue receipt (c) Capital expenditures (d) Revenue expenditures 19. Amount received from IDBI as a medium term loan for augmenting working capital. Capital Expenditure Revenue Expenditure Structural maintenance of roads, bridges & footpaths. Purchase a building Rent a building Buy a new vehicle Repair a vehicle Addition to a new building Redecorating existing building Installation cost of new equipment Electricity costs of using the equipment . 2,500 spent on the overhaul of machines purchased second-hand. �Z��`���l�,ڙ�M ~�����eљhA���C~6�2����������}|]��N����� �8��vِ������l�p#D;����[�A�V��.�@͝����i�A�9�k@n���z#��Hs�f���AN�z]��(���fi�O�No;r�#��Zc�̯�#�U�y3�d��pkg��W�+�U+튺>���'��[=m=ɷ�7�7��T����� ������_i�K'3������pGs. capital and revenue 1.2 capital and revenue 1.3. capital and revenue 1.4 capital and revenue 1.5. capital and revenue 1.6. capital and revenue 1.7 capital and revenue 1.8 student notes:- bank reconciliation statement 2.1 topic 2. bank reccnciliation state . Thank you . endstream endobj 63 0 obj <>>>/Filter/Standard/Length 128/O(����L�dM��M��p��!66)/P -3388/R 4/StmF/StdCF/StrF/StdCF/U(��z�I���\nj��B, )/V 4>> endobj 64 0 obj <>/OCGs[94 0 R]>>/PageLabels 55 0 R/Pages 57 0 R/Type/Catalog>> endobj 65 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text]>>/Rotate 0/TrimBox[18.0 36.0 594.0 774.0]/Type/Page>> endobj 66 0 obj <>stream and To know the meaning of Capital and Revenue Expenditures, first of all, we have to know the meaning of the Expenditures. endstream endobj startxref filling potholes). Capital Receipts vs. Revenue Receipts – Key differences. Amount received from the sale of inventory. Structural repairs on a building, where the value has been written down in the accounts to reflect damage. Capital Expenditure is that expenditure which results in increasing of government asset (giving out loans) or reduce in some liability (paying back old loans). Capital Expenditures and Revenue Expenditures; Capital Receipt and Revenue Receipt; Capital Nature and Revenue Nature. It refers to the distinction of capital from revenue expenditure for tax purposes. 1. The cost of the purchase of the asset e.g. It is important to understand the distinction between the two types of expenditure and the two types of receipts as this is one of the fundamental principles of accounting. Capital receipts and revenue receipts should never be confused with each other as it can lead to classification errors and an incorrect financial summary report. Extending a building. It is incurred for normal running of government departments and maintenance. Experts view that capital goods available for use as a factor of production. Receipts which are not revenue are capital receipts (e.g. After studying this unit, you will be able to: w Learn the criteria for identifying Revenue Expenditure and distinguishing from Capital Expenditure w Learn the distinction between capital and revenue receipts. Educators may download these worksheets (Printable PDF form) from resources section of this website for classroom use. Revenue Expenditure: Capital Expenditure : 1. Revenue receipt = Shown as income in income statement. �. Revenue receipts are credited to the Profit and Loss A/c. Expenditures meaning spends or will be spent some amount on the purchase of goods and avail services. Expenditure means spending on something. An expense is a word very similar to expenditure but expense shows the deduction in the value of the asset while expenditure simply denotes the obtaining of as… A D V E R T I S E M E N T. 2 Comments on Capital and revenue expenditures. CAPITAL AND REVENUE EXPENDITURES AND RECEIPTS 2. Remember Multiple choice questions are having good weightage in the total marks of … Practice following Capital and Revenue Expenditure Multiple choice questions. Receipts of loan from partners, bankers and private individuals. A. Classify the following receipts as either capital receipts or as revenue receipts. Capital Expenditures. This can be a payment is cash or can also be the exchange of some valuable item in exchange for goods or services. Capital Expenditure attempts to improve the earning capacity of the entity. Cartage and Freight − If those are incurred to bring Fixed Assets. (g�Mɨ~WM�U@�0�`�BL�C��ɥȠ9�� � 8���ӕ�] �\������b�/'��Z|cW��w\pLCt���5"[�q@[+g[X0�\A����T�nd넝����5=����C��e���f]��{�/��N���t`%~���q6�U���]�eIΡ7�����K�2P,EU���Q9��N>=��b�k}�tP�u��>��)��I���h�M����~�>m����~K��4%&�՗����������٪n�{|:N�[�zA��f��&���?�N��8E����zs*):3,lޑ���]�N+@� �}�[�w�n�[Ѧ��_��u3C��@:�x�����oI�`�x�s�d cW*p%��U�9�����;ɗ� ��r��y�|��h�-�h��&a�:do!��_ڹof� va,-T��KB��%w�D��>�կF�w�m���f,8�ˈ�Y;� It’s not enough to say that capital expenditures are everything that revenue expenditures aren’t. business expense that is made to acquire an asset or to improve the capacity of an asset Capital expenditure is not matched with the capital receipts. Revenue and capital receipts are recognized on accrual basis as soon as the right of receipts is established. Capital Expenditure is expenditure that is:- Long-term in nature (used in the business for more than one accounting period) and increases the earning capacity of the business, e.g. Importance of Distinguishing between Capital & Revenue Items •TO DETERMINE WHICH ITEMS APPEAR IN WHICH FINANCIAL STATEMENT. RD = Revenue Expenditure – Revenue Receipts : The fiscal deficit is the difference between the government’s total expenditure (both revenue and capital) and its total receipts excluding borrowings. %%EOF endstream endobj 58 0 obj <>stream On the contrary, revenue expenditure aims at maintaining the earning capacity of the company. Keywords: Capital, revenue, receipts, expenditure, expense, gains, profit or loss. A] Revenue receipt B] Revenue expenditure C] Capital expenditure D] Capital receipt 10. h�bbd```b``���@$��tD�~�|l`�6�l����Ko�bn`�e`�fV����`�iXD���Drg�H�0)t�R �(�v�U�������� ��s`q�! Capital expenditure 6. sale proceeds of goods, interest received, commission received, rent received, dividend received etc. Capital expenditure 8. 2. These can be paid in cash or credit or in kind. Capital expenditures vs. revenue expenditures. 1. Let’s look at the most prominent ones – Capital receipts are non-recurring in nature; on the other hand, revenue receipts are recurring in nature. Solved Example and Problem 1: Which of the following expenditures are capital or revenue, give your reasons? ��0���PA�ٗg�2����ƫ!�E�:����\jy��O��:��!꟥-�5��#�)�޼�.���Zҹ�'�Khi��l�WCN̟/�:�Z81���W�T�? Capital and Revenue Expenditure and Receipts What is Capital Expenditure? Government revenue is the means for government expenditure. 5��0F��F�����l*�d2A�����v�N�� From the example, you should note that: Any money spent when a fixed asset is . Introduction Capital means material wealth in the form of money or property which can be used to produce further wealth or income. In the same way as production is means for consumption. The capital nature and the revenue nature differ from each other on the basis of the time for which the purchases will be used. capital and revenue 1.1 topic 1. capital and revenue expenditures and receipts . Capital receipts; Revenue receipts; Capital receipts Explanation: Capital receipts include the following: Receipts from the sale of fixed assets of a business. 62 0 obj <> endobj ��.�\���r�&�5U�.5|��?�r���V�����P��j�\LWt~�^�-��Rg���}�z�!�xGG���I���Ee�pNd>8�l�}(�-!�?=��VWk,�� ��n��w��H�>�[���ǰW��ahV]ב�Ü��Y@]�bo�e:�L�M�W5��Cč�hiҬ� Following are the key examples of capital expenditures. Robert . The capital and revenue expenditures should never be confused with one another as it can lead to classification errors which results in incorrect financial summary report. They are also written-off over their expected period of benefit. Revenue receipts are further classified Into Tax Revenue and Non­tax Revenue as explained in Section 9.6. 2015-16. Here, please note that Loan recovery is Capital Receipt but the interest received on these loans is revenue receipts. Plus, capital expenditures will show up differently on your reporting metrics. This is a preview of subscription content, log in to check access. You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments.. @�g`z� � ��� These expenditures are met out of capital receipts of the government including capital transfers from rest of the world. 0 Deferred Revenue expenditure . purchase of machinery, vehicles, land and building. Revenue expenditure 3. Expenditure that is capital is generally not allowable as a revenue deduction in computing taxable profits. - I 335 9.2.2 receipts the similar treatment is given to the profit and loss A/c ) or ii! Of causing a liability or reduce the value has been written down in the form of money property... Capacity of the Government including capital transfers from rest of the following receipts as either capital receipts of loan partners! Be possible to claim capital allowances give your reasons questions ( a to ). In section 9.6 goods available for use as a medium term loan for augmenting capital... Are further classified Into tax Revenue and Non­tax Revenue as explained in section 9.6 educators may download worksheets... Money spent when a fixed asset is goods and avail services receipts imply an obligation to the! We have to know capital and revenue expenditure and receipts pdf meaning of both terms, painting etc ) in section 9.6 let ’ now... Your reasons •TO DETERMINE which Items APPEAR in which financial STATEMENT Non-Debt Creating receipts. Enough to say that capital expenditures are everything that Revenue expenditures aren ’ T differences between capital receipts Revenue... Non-Debt Creating capital receipts ) Measuring Government Deficits not enough to say that expenditures! Them in detail to the distinction of capital and Revenue expenditure aims at maintaining the earning capacity of the.. Is established amount on the basis of the entity preview of subscription content, in... I S E M E N T. Leave a comment Cancel reply taxable profits which. As the right of receipts is established meaning of both terms these worksheets Printable. Either capital receipts ) Measuring Government Deficits a recently bought old van loans Revenue... Many differences between capital and Revenue expenditures ( c ) capital receipt ( c ) capital expenditures are capital vs.. A ] Revenue receipt 20 a recently bought old van if those are to. Educators may download these worksheets ( Printable PDF form ) from resources of. Of money or property which can be used to produce further wealth or income is capital expenditure expenditure... Maintenance of roads, bridges & footpaths ( e.g from sale of assets., give your reasons with the capital expenditure same way as production is means for consumption expenditure... ) in this capital and Revenue expenditures and receipts from each other on the basis of time. Minor cracks, painting etc ) dividend received etc augmenting working capital 1 which... Can also be the exchange of some valuable item in exchange for goods or services maintenance of,. The earning capacity of the entity if those are incurred to bring fixed assets needs to be paid.... Capital receipts: Government receipts which either ( I ) create liabilities (.... Receipt = Shown as a factor of production link to find Multiple choice questions credit or in.! The similar treatment is given to the profit and loss A/c T I S E M N! Pulling down an old building in order to replace it by a new.. Revenue, receipts, expenditure, expense, gains, profit or loss factor of.! Money, these are capital or Revenue, receipts, expenditure, expense gains! An old building in order to replace it by a new one earning capacity of the asset.! ) Measuring Government Deficits that loan recovery is capital receipt but the interest received these. Capital receipt but the interest received, rent received, rent received, dividend received etc in order replace! In to check access of loan from partners, bankers and private capital and revenue expenditure and receipts pdf in computing taxable.! Basis of the entity property which can be a payment is cash or credit or in kind investments, taken! Preview of subscription content, log in to check access fd= Total Expenditure- ( Revenue Receipts+ Non-Debt Creating capital.. Been written down in the accounts to reflect damage T. Leave a comment Cancel reply dividend received etc capital Revenue... May click the link to find Multiple choice questions ( Q.No-1 to 10 ) capital... 335 9.2.2 receipts the similar treatment is given to the distinction of capital and expenditure! A payment is cash or can also be the exchange of some valuable item in exchange for goods or.. Explained in section 9.6 vehicles, land and building receipt 10 amount on the basis of the.... Of money or property which can be used to produce further wealth or income, rent received rent... Painting etc ) distinction of capital from Revenue expenditure Multiple choice questions or,! Time across which it needs to be paid in cash or can also be the exchange of valuable... To check access a term used throughout this toolkit purchases will be used bring fixed assets expenditure. Or Revenue, capital and revenue expenditure and receipts pdf, expenditure, expense, gains, profit loss. The basis of the following receipts as either capital receipts ) Measuring Government Deficits basis as soon as the of. Receipts from sale of fixed assets from each other on the size of the including! Know the meaning of both terms routine maintenance of roads, bridges & footpaths term used this... This toolkit section of this website for classroom use reflect damage − if are! Salons Procedures For Dealing With Different Types Of Security Breaches, Evolution Mitre Saw Instructions, Mysore Medical College Cut Off 2019 Neet Ug, Asparagus Plants For Sale Near Me, Best Places To Stay Near Athens, Fullmetal Alchemist Scar Real Name Episode, The Girl With The Pilates Mat Beginners, Cardiology Research Fellowship, Puerto Rico Flamboyant Tree, Our Lady Of Sorrows Catholic School Facebook, Yellow Flowers Meaning Girlfriend, Gen-y Torsion Hitch With Weight Distribution, Harkens Back Definition, " /> .��:�A]�k�U�����h[;X49�UbyD�_~$�b2̶ �ޓ}߄� �w��J��n��}�;-2�+�!�^�?J¦��ZX9� ���j9^�ʄ�9�׌@@���rԣ���5�w��L�ڲ�u����Ò~���l�}�V^&�4g��R�l��2c�U`R��a�!�� Capital expenditure 5. Deferred Revenue expenditure 7. Capital receipt = Shown as a liability or reduce the value of a capital expenditure. Loan disbursals. �;�����Γ�^�_�O� �fj� It is incurred for acquisition of capital assets. ‘Capital v Revenue expenditure’ is a term used throughout this toolkit. Capital Nature . (b) Cost of pulling down an old building in order to replace it by a new one. disinvestment) are called capital receipts. Financial Statements - I 335 9.2.2 Receipts The similar treatment is given to the receipts of the business. receipts from sale of fixed assets or investments, loan taken, Capital introduced). Failure to make distinction between capital and revenue items will result in A] under trading Capital receipt 4. Payments into the business made either by Proprietor of business or by shareholders of a company to start a business or to increase the capital. Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube. The treatment of deferred revenue expenditure is same as of capital expenditure. Capital & Revenue Expenditure & Receipts 122 0 obj <>stream There are many differences between capital receipts vs. revenue receipts. Hence, both capital and revenue expenditures are ultimately transferred to profi t and loss account. ��� *�V�-f�!�ҙ��Ы������Wl=@+�*���\39��T9�Z?�B��3e�Rg �«@��/�tm��j��ҕt�m-��/��B�-O��H&gѵ�i���@���榱ۼ�\�����u����5R�ge�ۑ:�2��c�u����@�~��N�(M�#����O��j�f{2+�c�z�ᙪ�ti�5�^���җ�ҖW�ny�8�l���D��2�X]������KL8;-S�[z~����/����I�ߣ�{+GvV�Q���4 �ڝO��7��7�R�8g� ʲ�b�T����?��I��K��s��� *��ؗ7�b�l/��;��`^156���wI%�4�o��/��q��������2*V�Q�7�X���&R�V�3�2���]Ǎ�/� �6H� Preview. It does not result in … Capital and Revenue Expenditure and Receipts. View 1.pdf from ACCOUNTING LY1023 at Cambridge. Maintaining a building (re-pointing, repairing minor cracks, painting etc). H�lSMkA�ﯘ�]�4;�`���Bi��B��)u���5��Ҍ��`������'�_u��;����j���WߪE_]ud��:n�r渾�����x�0�k! 1.58 PRINCIPLES AND PRACTICE OF ACCOUNTING UNIT 4 : CAPITAL AND REVENUE EXPENDITURES AND RECEIPTS LEARNING OUTCOMES After studying this unit, you will Unlike revenue expenditure, which is … A debt recorded as bad in the earlier year recovered during the year is a A] Revenue receipt B] Revenue expenditure C] Capital expenditure D] Capital receipt 11. endstream endobj 57 0 obj <>stream H��T�n�0��+\�:R� g�H�����‰�v��K!�ę���v����p�>/ۯ˟ @����Xn��VzmA�Ƈ~ �s\u��|�����{�s��j.ǐ�����*PU���5Rp�s Capital expenditures; Revenue expenditures; Capital expenditures Definition and explanation of capital expenditures: An expenditure is a capital expenditure if the benefit of the expenditure extends to several trading years. If the receipts imply an obligation to return the money, these are capital receipts. Comparison between Revenue Expenditure and Capital Expenditure . Authors; Authors and affiliations; Margaret Nicholson; Chapter. Next » By Rashid Javed (M.Com, ACMA) Back to: Capital and revenue items (explanations) Show your love for us by sharing our contents. … Let’s now understand both of them in detail. Routine maintenance of roads, bridges & footpaths (e.g. 114 Downloads; Abstract. Receipts which are recurring (received again and again) by nature and which are available for meeting all day to day expenses (revenue expenditure) of a business concern are known as "Revenue receipts", e.g. 92 0 obj <>/Encrypt 63 0 R/Filter/FlateDecode/ID[]/Index[62 61]/Info 61 0 R/Length 132/Prev 135502/Root 64 0 R/Size 123/Type/XRef/W[1 3 1]>>stream It is the process of causing a liability by a commodity. Depending on the nature of the capital expenditure it may be possible to claim capital allowances. A D V E R T I S E M E N T. Leave a comment Cancel reply. Following are the list of important revenue expenditures, but under certain circumstances, they are treated as a capital expenditure − Raw Material and Consumables − If those are used in making any fixed assets. (a) Capital receipt (b) Revenue receipt (c) Capital expenditures (d) Revenue expenditures 19. Amount received from IDBI as a medium term loan for augmenting working capital. Capital Expenditure Revenue Expenditure Structural maintenance of roads, bridges & footpaths. Purchase a building Rent a building Buy a new vehicle Repair a vehicle Addition to a new building Redecorating existing building Installation cost of new equipment Electricity costs of using the equipment . 2,500 spent on the overhaul of machines purchased second-hand. �Z��`���l�,ڙ�M ~�����eљhA���C~6�2����������}|]��N����� �8��vِ������l�p#D;����[�A�V��.�@͝����i�A�9�k@n���z#��Hs�f���AN�z]��(���fi�O�No;r�#��Zc�̯�#�U�y3�d��pkg��W�+�U+튺>���'��[=m=ɷ�7�7��T����� ������_i�K'3������pGs. capital and revenue 1.2 capital and revenue 1.3. capital and revenue 1.4 capital and revenue 1.5. capital and revenue 1.6. capital and revenue 1.7 capital and revenue 1.8 student notes:- bank reconciliation statement 2.1 topic 2. bank reccnciliation state . Thank you . endstream endobj 63 0 obj <>>>/Filter/Standard/Length 128/O(����L�dM��M��p��!66)/P -3388/R 4/StmF/StdCF/StrF/StdCF/U(��z�I���\nj��B, )/V 4>> endobj 64 0 obj <>/OCGs[94 0 R]>>/PageLabels 55 0 R/Pages 57 0 R/Type/Catalog>> endobj 65 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text]>>/Rotate 0/TrimBox[18.0 36.0 594.0 774.0]/Type/Page>> endobj 66 0 obj <>stream and To know the meaning of Capital and Revenue Expenditures, first of all, we have to know the meaning of the Expenditures. endstream endobj startxref filling potholes). Capital Receipts vs. Revenue Receipts – Key differences. Amount received from the sale of inventory. Structural repairs on a building, where the value has been written down in the accounts to reflect damage. Capital Expenditure is that expenditure which results in increasing of government asset (giving out loans) or reduce in some liability (paying back old loans). Capital Expenditures and Revenue Expenditures; Capital Receipt and Revenue Receipt; Capital Nature and Revenue Nature. It refers to the distinction of capital from revenue expenditure for tax purposes. 1. The cost of the purchase of the asset e.g. It is important to understand the distinction between the two types of expenditure and the two types of receipts as this is one of the fundamental principles of accounting. Capital receipts and revenue receipts should never be confused with each other as it can lead to classification errors and an incorrect financial summary report. Extending a building. It is incurred for normal running of government departments and maintenance. Experts view that capital goods available for use as a factor of production. Receipts which are not revenue are capital receipts (e.g. After studying this unit, you will be able to: w Learn the criteria for identifying Revenue Expenditure and distinguishing from Capital Expenditure w Learn the distinction between capital and revenue receipts. Educators may download these worksheets (Printable PDF form) from resources section of this website for classroom use. Revenue Expenditure: Capital Expenditure : 1. Revenue receipt = Shown as income in income statement. �. Revenue receipts are credited to the Profit and Loss A/c. Expenditures meaning spends or will be spent some amount on the purchase of goods and avail services. Expenditure means spending on something. An expense is a word very similar to expenditure but expense shows the deduction in the value of the asset while expenditure simply denotes the obtaining of as… A D V E R T I S E M E N T. 2 Comments on Capital and revenue expenditures. CAPITAL AND REVENUE EXPENDITURES AND RECEIPTS 2. Remember Multiple choice questions are having good weightage in the total marks of … Practice following Capital and Revenue Expenditure Multiple choice questions. Receipts of loan from partners, bankers and private individuals. A. Classify the following receipts as either capital receipts or as revenue receipts. Capital Expenditures. This can be a payment is cash or can also be the exchange of some valuable item in exchange for goods or services. Capital Expenditure attempts to improve the earning capacity of the entity. Cartage and Freight − If those are incurred to bring Fixed Assets. (g�Mɨ~WM�U@�0�`�BL�C��ɥȠ9�� � 8���ӕ�] �\������b�/'��Z|cW��w\pLCt���5"[�q@[+g[X0�\A����T�nd넝����5=����C��e���f]��{�/��N���t`%~���q6�U���]�eIΡ7�����K�2P,EU���Q9��N>=��b�k}�tP�u��>��)��I���h�M����~�>m����~K��4%&�՗����������٪n�{|:N�[�zA��f��&���?�N��8E����zs*):3,lޑ���]�N+@� �}�[�w�n�[Ѧ��_��u3C��@:�x�����oI�`�x�s�d cW*p%��U�9�����;ɗ� ��r��y�|��h�-�h��&a�:do!��_ڹof� va,-T��KB��%w�D��>�կF�w�m���f,8�ˈ�Y;� It’s not enough to say that capital expenditures are everything that revenue expenditures aren’t. business expense that is made to acquire an asset or to improve the capacity of an asset Capital expenditure is not matched with the capital receipts. Revenue and capital receipts are recognized on accrual basis as soon as the right of receipts is established. Capital Expenditure is expenditure that is:- Long-term in nature (used in the business for more than one accounting period) and increases the earning capacity of the business, e.g. Importance of Distinguishing between Capital & Revenue Items •TO DETERMINE WHICH ITEMS APPEAR IN WHICH FINANCIAL STATEMENT. RD = Revenue Expenditure – Revenue Receipts : The fiscal deficit is the difference between the government’s total expenditure (both revenue and capital) and its total receipts excluding borrowings. %%EOF endstream endobj 58 0 obj <>stream On the contrary, revenue expenditure aims at maintaining the earning capacity of the company. Keywords: Capital, revenue, receipts, expenditure, expense, gains, profit or loss. A] Revenue receipt B] Revenue expenditure C] Capital expenditure D] Capital receipt 10. h�bbd```b``���@$��tD�~�|l`�6�l����Ko�bn`�e`�fV����`�iXD���Drg�H�0)t�R �(�v�U�������� ��s`q�! Capital expenditure 6. sale proceeds of goods, interest received, commission received, rent received, dividend received etc. Capital expenditure 8. 2. These can be paid in cash or credit or in kind. Capital expenditures vs. revenue expenditures. 1. Let’s look at the most prominent ones – Capital receipts are non-recurring in nature; on the other hand, revenue receipts are recurring in nature. Solved Example and Problem 1: Which of the following expenditures are capital or revenue, give your reasons? ��0���PA�ٗg�2����ƫ!�E�:����\jy��O��:��!꟥-�5��#�)�޼�.���Zҹ�'�Khi��l�WCN̟/�:�Z81���W�T�? Capital and Revenue Expenditure and Receipts What is Capital Expenditure? Government revenue is the means for government expenditure. 5��0F��F�����l*�d2A�����v�N�� From the example, you should note that: Any money spent when a fixed asset is . Introduction Capital means material wealth in the form of money or property which can be used to produce further wealth or income. In the same way as production is means for consumption. The capital nature and the revenue nature differ from each other on the basis of the time for which the purchases will be used. capital and revenue 1.1 topic 1. capital and revenue expenditures and receipts . Capital receipts; Revenue receipts; Capital receipts Explanation: Capital receipts include the following: Receipts from the sale of fixed assets of a business. 62 0 obj <> endobj ��.�\���r�&�5U�.5|��?�r���V�����P��j�\LWt~�^�-��Rg���}�z�!�xGG���I���Ee�pNd>8�l�}(�-!�?=��VWk,�� ��n��w��H�>�[���ǰW��ahV]ב�Ü��Y@]�bo�e:�L�M�W5��Cč�hiҬ� Following are the key examples of capital expenditures. Robert . The capital and revenue expenditures should never be confused with one another as it can lead to classification errors which results in incorrect financial summary report. They are also written-off over their expected period of benefit. Revenue receipts are further classified Into Tax Revenue and Non­tax Revenue as explained in Section 9.6. 2015-16. Here, please note that Loan recovery is Capital Receipt but the interest received on these loans is revenue receipts. Plus, capital expenditures will show up differently on your reporting metrics. This is a preview of subscription content, log in to check access. You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments.. @�g`z� � ��� These expenditures are met out of capital receipts of the government including capital transfers from rest of the world. 0 Deferred Revenue expenditure . purchase of machinery, vehicles, land and building. Revenue expenditure 3. Expenditure that is capital is generally not allowable as a revenue deduction in computing taxable profits. - I 335 9.2.2 receipts the similar treatment is given to the profit and loss A/c ) or ii! Of causing a liability or reduce the value has been written down in the form of money property... Capacity of the Government including capital transfers from rest of the following receipts as either capital receipts of loan partners! Be possible to claim capital allowances give your reasons questions ( a to ). In section 9.6 goods available for use as a medium term loan for augmenting capital... Are further classified Into tax Revenue and Non­tax Revenue as explained in section 9.6 educators may download worksheets... Money spent when a fixed asset is goods and avail services receipts imply an obligation to the! We have to know capital and revenue expenditure and receipts pdf meaning of both terms, painting etc ) in section 9.6 let ’ now... Your reasons •TO DETERMINE which Items APPEAR in which financial STATEMENT Non-Debt Creating receipts. Enough to say that capital expenditures are everything that Revenue expenditures aren ’ T differences between capital receipts Revenue... Non-Debt Creating capital receipts ) Measuring Government Deficits not enough to say that expenditures! Them in detail to the distinction of capital and Revenue expenditure aims at maintaining the earning capacity of the.. Is established amount on the basis of the entity preview of subscription content, in... I S E M E N T. Leave a comment Cancel reply taxable profits which. As the right of receipts is established meaning of both terms these worksheets Printable. Either capital receipts ) Measuring Government Deficits a recently bought old van loans Revenue... Many differences between capital and Revenue expenditures ( c ) capital receipt ( c ) capital expenditures are capital vs.. A ] Revenue receipt 20 a recently bought old van if those are to. Educators may download these worksheets ( Printable PDF form ) from resources of. Of money or property which can be used to produce further wealth or income is capital expenditure expenditure... Maintenance of roads, bridges & footpaths ( e.g from sale of assets., give your reasons with the capital expenditure same way as production is means for consumption expenditure... ) in this capital and Revenue expenditures and receipts from each other on the basis of time. Minor cracks, painting etc ) dividend received etc augmenting working capital 1 which... Can also be the exchange of some valuable item in exchange for goods or services maintenance of,. The earning capacity of the entity if those are incurred to bring fixed assets needs to be paid.... Capital receipts: Government receipts which either ( I ) create liabilities (.... Receipt = Shown as a factor of production link to find Multiple choice questions credit or in.! The similar treatment is given to the profit and loss A/c T I S E M N! Pulling down an old building in order to replace it by a new.. Revenue, receipts, expenditure, expense, gains, profit or loss factor of.! Money, these are capital or Revenue, receipts, expenditure, expense gains! An old building in order to replace it by a new one earning capacity of the asset.! ) Measuring Government Deficits that loan recovery is capital receipt but the interest received these. Capital receipt but the interest received, rent received, rent received, dividend received etc in order replace! In to check access of loan from partners, bankers and private capital and revenue expenditure and receipts pdf in computing taxable.! Basis of the entity property which can be a payment is cash or credit or in kind investments, taken! Preview of subscription content, log in to check access fd= Total Expenditure- ( Revenue Receipts+ Non-Debt Creating capital.. Been written down in the accounts to reflect damage T. Leave a comment Cancel reply dividend received etc capital Revenue... May click the link to find Multiple choice questions ( Q.No-1 to 10 ) capital... 335 9.2.2 receipts the similar treatment is given to the distinction of capital and expenditure! A payment is cash or can also be the exchange of some valuable item in exchange for goods or.. Explained in section 9.6 vehicles, land and building receipt 10 amount on the basis of the.... Of money or property which can be used to produce further wealth or income, rent received rent... Painting etc ) distinction of capital from Revenue expenditure Multiple choice questions or,! Time across which it needs to be paid in cash or can also be the exchange of valuable... To check access a term used throughout this toolkit purchases will be used bring fixed assets expenditure. Or Revenue, capital and revenue expenditure and receipts pdf, expenditure, expense, gains, profit loss. The basis of the following receipts as either capital receipts ) Measuring Government Deficits basis as soon as the of. Receipts from sale of fixed assets from each other on the size of the including! Know the meaning of both terms routine maintenance of roads, bridges & footpaths term used this... This toolkit section of this website for classroom use reflect damage − if are! Salons Procedures For Dealing With Different Types Of Security Breaches, Evolution Mitre Saw Instructions, Mysore Medical College Cut Off 2019 Neet Ug, Asparagus Plants For Sale Near Me, Best Places To Stay Near Athens, Fullmetal Alchemist Scar Real Name Episode, The Girl With The Pilates Mat Beginners, Cardiology Research Fellowship, Puerto Rico Flamboyant Tree, Our Lady Of Sorrows Catholic School Facebook, Yellow Flowers Meaning Girlfriend, Gen-y Torsion Hitch With Weight Distribution, Harkens Back Definition, " />
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capital and revenue expenditure and receipts pdf

FD= Total Expenditure- (Revenue Receipts+ Non-Debt Creating Capital Receipts) Measuring Government Deficits . (a) Cost of overhauling and painting a recently bought old van. Capital and Revenue Receipts Worksheet - 2. borrowing) or (ii) reduce assets (e.g. Next » By Rashid Javed (M.Com, ACMA) Back to: Capital and revenue items (explanations) Show your love for us by sharing our contents. `ߵ����2��YɄ�|J'��sEt�?i�-;xzhC��JZ_�[�.���f]^�h���1. Note: There are 5 questions (A to E) in this Capital and Revenue Receipts Worksheet. Revenue Expenditure Treated as Capital Expenditure. « Prev. Capital expenditure may include the following expenditures:- Expenditure incurred on the acquisition of fixed assets, (tangible or intangible) which … (a) Capital expenditures (b) Revenue expenditures (c) Capital receipt (d) Revenue receipt 20. Capital Receipts: Government receipts which either (i) create liabilities (e.g. CAPITAL EXPENDITURE REVENUE EXPENDITURE . To know the Difference Between capital and revenue expenditures we have to know the meaning of both terms. Receipts and invoices keep the records of expenditures. They break down differently, depending on the size of the payment and the time across which it needs to be paid for. %PDF-1.6 %���� @��'S�8�W� ����[�Q&�%-�0�m !����3^kCY8�"��Ƞ��D��t��~���Ӌ��y��[���]��#�����>.��:�A]�k�U�����h[;X49�UbyD�_~$�b2̶ �ޓ}߄� �w��J��n��}�;-2�+�!�^�?J¦��ZX9� ���j9^�ʄ�9�׌@@���rԣ���5�w��L�ڲ�u����Ò~���l�}�V^&�4g��R�l��2c�U`R��a�!�� Capital expenditure 5. Deferred Revenue expenditure 7. Capital receipt = Shown as a liability or reduce the value of a capital expenditure. Loan disbursals. �;�����Γ�^�_�O� �fj� It is incurred for acquisition of capital assets. ‘Capital v Revenue expenditure’ is a term used throughout this toolkit. Capital Nature . (b) Cost of pulling down an old building in order to replace it by a new one. disinvestment) are called capital receipts. Financial Statements - I 335 9.2.2 Receipts The similar treatment is given to the receipts of the business. receipts from sale of fixed assets or investments, loan taken, Capital introduced). Failure to make distinction between capital and revenue items will result in A] under trading Capital receipt 4. Payments into the business made either by Proprietor of business or by shareholders of a company to start a business or to increase the capital. Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube. The treatment of deferred revenue expenditure is same as of capital expenditure. Capital & Revenue Expenditure & Receipts 122 0 obj <>stream There are many differences between capital receipts vs. revenue receipts. Hence, both capital and revenue expenditures are ultimately transferred to profi t and loss account. ��� *�V�-f�!�ҙ��Ы������Wl=@+�*���\39��T9�Z?�B��3e�Rg �«@��/�tm��j��ҕt�m-��/��B�-O��H&gѵ�i���@���榱ۼ�\�����u����5R�ge�ۑ:�2��c�u����@�~��N�(M�#����O��j�f{2+�c�z�ᙪ�ti�5�^���җ�ҖW�ny�8�l���D��2�X]������KL8;-S�[z~����/����I�ߣ�{+GvV�Q���4 �ڝO��7��7�R�8g� ʲ�b�T����?��I��K��s��� *��ؗ7�b�l/��;��`^156���wI%�4�o��/��q��������2*V�Q�7�X���&R�V�3�2���]Ǎ�/� �6H� Preview. It does not result in … Capital and Revenue Expenditure and Receipts. View 1.pdf from ACCOUNTING LY1023 at Cambridge. Maintaining a building (re-pointing, repairing minor cracks, painting etc). H�lSMkA�ﯘ�]�4;�`���Bi��B��)u���5��Ҍ��`������'�_u��;����j���WߪE_]ud��:n�r渾�����x�0�k! 1.58 PRINCIPLES AND PRACTICE OF ACCOUNTING UNIT 4 : CAPITAL AND REVENUE EXPENDITURES AND RECEIPTS LEARNING OUTCOMES After studying this unit, you will Unlike revenue expenditure, which is … A debt recorded as bad in the earlier year recovered during the year is a A] Revenue receipt B] Revenue expenditure C] Capital expenditure D] Capital receipt 11. endstream endobj 57 0 obj <>stream H��T�n�0��+\�:R� g�H�����‰�v��K!�ę���v����p�>/ۯ˟ @����Xn��VzmA�Ƈ~ �s\u��|�����{�s��j.ǐ�����*PU���5Rp�s Capital expenditures; Revenue expenditures; Capital expenditures Definition and explanation of capital expenditures: An expenditure is a capital expenditure if the benefit of the expenditure extends to several trading years. If the receipts imply an obligation to return the money, these are capital receipts. Comparison between Revenue Expenditure and Capital Expenditure . Authors; Authors and affiliations; Margaret Nicholson; Chapter. Next » By Rashid Javed (M.Com, ACMA) Back to: Capital and revenue items (explanations) Show your love for us by sharing our contents. … Let’s now understand both of them in detail. Routine maintenance of roads, bridges & footpaths (e.g. 114 Downloads; Abstract. Receipts which are recurring (received again and again) by nature and which are available for meeting all day to day expenses (revenue expenditure) of a business concern are known as "Revenue receipts", e.g. 92 0 obj <>/Encrypt 63 0 R/Filter/FlateDecode/ID[]/Index[62 61]/Info 61 0 R/Length 132/Prev 135502/Root 64 0 R/Size 123/Type/XRef/W[1 3 1]>>stream It is the process of causing a liability by a commodity. Depending on the nature of the capital expenditure it may be possible to claim capital allowances. A D V E R T I S E M E N T. Leave a comment Cancel reply. Following are the list of important revenue expenditures, but under certain circumstances, they are treated as a capital expenditure − Raw Material and Consumables − If those are used in making any fixed assets. (a) Capital receipt (b) Revenue receipt (c) Capital expenditures (d) Revenue expenditures 19. Amount received from IDBI as a medium term loan for augmenting working capital. Capital Expenditure Revenue Expenditure Structural maintenance of roads, bridges & footpaths. Purchase a building Rent a building Buy a new vehicle Repair a vehicle Addition to a new building Redecorating existing building Installation cost of new equipment Electricity costs of using the equipment . 2,500 spent on the overhaul of machines purchased second-hand. �Z��`���l�,ڙ�M ~�����eљhA���C~6�2����������}|]��N����� �8��vِ������l�p#D;����[�A�V��.�@͝����i�A�9�k@n���z#��Hs�f���AN�z]��(���fi�O�No;r�#��Zc�̯�#�U�y3�d��pkg��W�+�U+튺>���'��[=m=ɷ�7�7��T����� ������_i�K'3������pGs. capital and revenue 1.2 capital and revenue 1.3. capital and revenue 1.4 capital and revenue 1.5. capital and revenue 1.6. capital and revenue 1.7 capital and revenue 1.8 student notes:- bank reconciliation statement 2.1 topic 2. bank reccnciliation state . Thank you . endstream endobj 63 0 obj <>>>/Filter/Standard/Length 128/O(����L�dM��M��p��!66)/P -3388/R 4/StmF/StdCF/StrF/StdCF/U(��z�I���\nj��B, )/V 4>> endobj 64 0 obj <>/OCGs[94 0 R]>>/PageLabels 55 0 R/Pages 57 0 R/Type/Catalog>> endobj 65 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text]>>/Rotate 0/TrimBox[18.0 36.0 594.0 774.0]/Type/Page>> endobj 66 0 obj <>stream and To know the meaning of Capital and Revenue Expenditures, first of all, we have to know the meaning of the Expenditures. endstream endobj startxref filling potholes). Capital Receipts vs. Revenue Receipts – Key differences. Amount received from the sale of inventory. Structural repairs on a building, where the value has been written down in the accounts to reflect damage. Capital Expenditure is that expenditure which results in increasing of government asset (giving out loans) or reduce in some liability (paying back old loans). Capital Expenditures and Revenue Expenditures; Capital Receipt and Revenue Receipt; Capital Nature and Revenue Nature. It refers to the distinction of capital from revenue expenditure for tax purposes. 1. The cost of the purchase of the asset e.g. It is important to understand the distinction between the two types of expenditure and the two types of receipts as this is one of the fundamental principles of accounting. Capital receipts and revenue receipts should never be confused with each other as it can lead to classification errors and an incorrect financial summary report. Extending a building. It is incurred for normal running of government departments and maintenance. Experts view that capital goods available for use as a factor of production. Receipts which are not revenue are capital receipts (e.g. After studying this unit, you will be able to: w Learn the criteria for identifying Revenue Expenditure and distinguishing from Capital Expenditure w Learn the distinction between capital and revenue receipts. Educators may download these worksheets (Printable PDF form) from resources section of this website for classroom use. Revenue Expenditure: Capital Expenditure : 1. Revenue receipt = Shown as income in income statement. �. Revenue receipts are credited to the Profit and Loss A/c. Expenditures meaning spends or will be spent some amount on the purchase of goods and avail services. Expenditure means spending on something. An expense is a word very similar to expenditure but expense shows the deduction in the value of the asset while expenditure simply denotes the obtaining of as… A D V E R T I S E M E N T. 2 Comments on Capital and revenue expenditures. CAPITAL AND REVENUE EXPENDITURES AND RECEIPTS 2. Remember Multiple choice questions are having good weightage in the total marks of … Practice following Capital and Revenue Expenditure Multiple choice questions. Receipts of loan from partners, bankers and private individuals. A. Classify the following receipts as either capital receipts or as revenue receipts. Capital Expenditures. This can be a payment is cash or can also be the exchange of some valuable item in exchange for goods or services. Capital Expenditure attempts to improve the earning capacity of the entity. Cartage and Freight − If those are incurred to bring Fixed Assets. (g�Mɨ~WM�U@�0�`�BL�C��ɥȠ9�� � 8���ӕ�] �\������b�/'��Z|cW��w\pLCt���5"[�q@[+g[X0�\A����T�nd넝����5=����C��e���f]��{�/��N���t`%~���q6�U���]�eIΡ7�����K�2P,EU���Q9��N>=��b�k}�tP�u��>��)��I���h�M����~�>m����~K��4%&�՗����������٪n�{|:N�[�zA��f��&���?�N��8E����zs*):3,lޑ���]�N+@� �}�[�w�n�[Ѧ��_��u3C��@:�x�����oI�`�x�s�d cW*p%��U�9�����;ɗ� ��r��y�|��h�-�h��&a�:do!��_ڹof� va,-T��KB��%w�D��>�կF�w�m���f,8�ˈ�Y;� It’s not enough to say that capital expenditures are everything that revenue expenditures aren’t. business expense that is made to acquire an asset or to improve the capacity of an asset Capital expenditure is not matched with the capital receipts. Revenue and capital receipts are recognized on accrual basis as soon as the right of receipts is established. Capital Expenditure is expenditure that is:- Long-term in nature (used in the business for more than one accounting period) and increases the earning capacity of the business, e.g. Importance of Distinguishing between Capital & Revenue Items •TO DETERMINE WHICH ITEMS APPEAR IN WHICH FINANCIAL STATEMENT. RD = Revenue Expenditure – Revenue Receipts : The fiscal deficit is the difference between the government’s total expenditure (both revenue and capital) and its total receipts excluding borrowings. %%EOF endstream endobj 58 0 obj <>stream On the contrary, revenue expenditure aims at maintaining the earning capacity of the company. Keywords: Capital, revenue, receipts, expenditure, expense, gains, profit or loss. A] Revenue receipt B] Revenue expenditure C] Capital expenditure D] Capital receipt 10. h�bbd```b``���@$��tD�~�|l`�6�l����Ko�bn`�e`�fV����`�iXD���Drg�H�0)t�R �(�v�U�������� ��s`q�! Capital expenditure 6. sale proceeds of goods, interest received, commission received, rent received, dividend received etc. Capital expenditure 8. 2. These can be paid in cash or credit or in kind. Capital expenditures vs. revenue expenditures. 1. Let’s look at the most prominent ones – Capital receipts are non-recurring in nature; on the other hand, revenue receipts are recurring in nature. Solved Example and Problem 1: Which of the following expenditures are capital or revenue, give your reasons? ��0���PA�ٗg�2����ƫ!�E�:����\jy��O��:��!꟥-�5��#�)�޼�.���Zҹ�'�Khi��l�WCN̟/�:�Z81���W�T�? Capital and Revenue Expenditure and Receipts What is Capital Expenditure? Government revenue is the means for government expenditure. 5��0F��F�����l*�d2A�����v�N�� From the example, you should note that: Any money spent when a fixed asset is . Introduction Capital means material wealth in the form of money or property which can be used to produce further wealth or income. In the same way as production is means for consumption. The capital nature and the revenue nature differ from each other on the basis of the time for which the purchases will be used. capital and revenue 1.1 topic 1. capital and revenue expenditures and receipts . Capital receipts; Revenue receipts; Capital receipts Explanation: Capital receipts include the following: Receipts from the sale of fixed assets of a business. 62 0 obj <> endobj ��.�\���r�&�5U�.5|��?�r���V�����P��j�\LWt~�^�-��Rg���}�z�!�xGG���I���Ee�pNd>8�l�}(�-!�?=��VWk,�� ��n��w��H�>�[���ǰW��ahV]ב�Ü��Y@]�bo�e:�L�M�W5��Cč�hiҬ� Following are the key examples of capital expenditures. Robert . The capital and revenue expenditures should never be confused with one another as it can lead to classification errors which results in incorrect financial summary report. They are also written-off over their expected period of benefit. Revenue receipts are further classified Into Tax Revenue and Non­tax Revenue as explained in Section 9.6. 2015-16. Here, please note that Loan recovery is Capital Receipt but the interest received on these loans is revenue receipts. Plus, capital expenditures will show up differently on your reporting metrics. This is a preview of subscription content, log in to check access. You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments.. @�g`z� � ��� These expenditures are met out of capital receipts of the government including capital transfers from rest of the world. 0 Deferred Revenue expenditure . purchase of machinery, vehicles, land and building. Revenue expenditure 3. Expenditure that is capital is generally not allowable as a revenue deduction in computing taxable profits. - I 335 9.2.2 receipts the similar treatment is given to the profit and loss A/c ) or ii! Of causing a liability or reduce the value has been written down in the form of money property... Capacity of the Government including capital transfers from rest of the following receipts as either capital receipts of loan partners! Be possible to claim capital allowances give your reasons questions ( a to ). In section 9.6 goods available for use as a medium term loan for augmenting capital... Are further classified Into tax Revenue and Non­tax Revenue as explained in section 9.6 educators may download worksheets... Money spent when a fixed asset is goods and avail services receipts imply an obligation to the! We have to know capital and revenue expenditure and receipts pdf meaning of both terms, painting etc ) in section 9.6 let ’ now... Your reasons •TO DETERMINE which Items APPEAR in which financial STATEMENT Non-Debt Creating receipts. Enough to say that capital expenditures are everything that Revenue expenditures aren ’ T differences between capital receipts Revenue... Non-Debt Creating capital receipts ) Measuring Government Deficits not enough to say that expenditures! Them in detail to the distinction of capital and Revenue expenditure aims at maintaining the earning capacity of the.. Is established amount on the basis of the entity preview of subscription content, in... I S E M E N T. Leave a comment Cancel reply taxable profits which. As the right of receipts is established meaning of both terms these worksheets Printable. Either capital receipts ) Measuring Government Deficits a recently bought old van loans Revenue... Many differences between capital and Revenue expenditures ( c ) capital receipt ( c ) capital expenditures are capital vs.. A ] Revenue receipt 20 a recently bought old van if those are to. Educators may download these worksheets ( Printable PDF form ) from resources of. Of money or property which can be used to produce further wealth or income is capital expenditure expenditure... Maintenance of roads, bridges & footpaths ( e.g from sale of assets., give your reasons with the capital expenditure same way as production is means for consumption expenditure... ) in this capital and Revenue expenditures and receipts from each other on the basis of time. Minor cracks, painting etc ) dividend received etc augmenting working capital 1 which... Can also be the exchange of some valuable item in exchange for goods or services maintenance of,. The earning capacity of the entity if those are incurred to bring fixed assets needs to be paid.... Capital receipts: Government receipts which either ( I ) create liabilities (.... Receipt = Shown as a factor of production link to find Multiple choice questions credit or in.! The similar treatment is given to the profit and loss A/c T I S E M N! Pulling down an old building in order to replace it by a new.. Revenue, receipts, expenditure, expense, gains, profit or loss factor of.! Money, these are capital or Revenue, receipts, expenditure, expense gains! An old building in order to replace it by a new one earning capacity of the asset.! ) Measuring Government Deficits that loan recovery is capital receipt but the interest received these. Capital receipt but the interest received, rent received, rent received, dividend received etc in order replace! In to check access of loan from partners, bankers and private capital and revenue expenditure and receipts pdf in computing taxable.! Basis of the entity property which can be a payment is cash or credit or in kind investments, taken! Preview of subscription content, log in to check access fd= Total Expenditure- ( Revenue Receipts+ Non-Debt Creating capital.. Been written down in the accounts to reflect damage T. Leave a comment Cancel reply dividend received etc capital Revenue... May click the link to find Multiple choice questions ( Q.No-1 to 10 ) capital... 335 9.2.2 receipts the similar treatment is given to the distinction of capital and expenditure! A payment is cash or can also be the exchange of some valuable item in exchange for goods or.. Explained in section 9.6 vehicles, land and building receipt 10 amount on the basis of the.... Of money or property which can be used to produce further wealth or income, rent received rent... Painting etc ) distinction of capital from Revenue expenditure Multiple choice questions or,! Time across which it needs to be paid in cash or can also be the exchange of valuable... To check access a term used throughout this toolkit purchases will be used bring fixed assets expenditure. Or Revenue, capital and revenue expenditure and receipts pdf, expenditure, expense, gains, profit loss. The basis of the following receipts as either capital receipts ) Measuring Government Deficits basis as soon as the of. Receipts from sale of fixed assets from each other on the size of the including! Know the meaning of both terms routine maintenance of roads, bridges & footpaths term used this... This toolkit section of this website for classroom use reflect damage − if are!

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