capital and revenue expenditure and receipts pdf

View 1.pdf from ACCOUNTING LY1023 at Cambridge. �. CAPITAL EXPENDITURE REVENUE EXPENDITURE . Government revenue is the means for government expenditure. Capital expenditure 5. Revenue and capital receipts are recognized on accrual basis as soon as the right of receipts is established. Next » By Rashid Javed (M.Com, ACMA) Back to: Capital and revenue items (explanations) Show your love for us by sharing our contents. Plus, capital expenditures will show up differently on your reporting metrics. borrowing) or (ii) reduce assets (e.g. Revenue Expenditure Treated as Capital Expenditure. It is the process of causing a liability by a commodity. Structural repairs on a building, where the value has been written down in the accounts to reflect damage. They break down differently, depending on the size of the payment and the time across which it needs to be paid for. Expenditure that is capital is generally not allowable as a revenue deduction in computing taxable profits. 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 . Capital expenditure is not matched with the capital receipts. Following are the key examples of capital expenditures. Financial Statements - I 335 9.2.2 Receipts The similar treatment is given to the receipts of the business. Revenue receipts are credited to the Profit and Loss A/c. (b) Cost of pulling down an old building in order to replace it by a new one. Capital Expenditure attempts to improve the earning capacity of the entity. These expenditures are met out of capital receipts of the government including capital transfers from rest of the world. Revenue receipt = Shown as income in income statement. ��0���PA�ٗg�2����ƫ!�E�:����\jy��O��:��!꟥-�5��#�)�޼�.���Zҹ�'�Khi��l�WCN̟/�:�Z81���W�T�? It is incurred for normal running of government departments and maintenance. Capital expenditure 6. « Prev. 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 Amount received from IDBI as a medium term loan for augmenting working capital. Deferred Revenue expenditure . Expenditure means spending on something. 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. 0 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. (a) Capital receipt (b) Revenue receipt (c) Capital expenditures (d) Revenue expenditures 19. (a) Capital expenditures (b) Revenue expenditures (c) Capital receipt (d) Revenue receipt 20. Solved Example and Problem 1: Which of the following expenditures are capital or revenue, give your reasons? 114 Downloads; Abstract. It’s not enough to say that capital expenditures are everything that revenue expenditures aren’t. 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. Maintaining a building (re-pointing, repairing minor cracks, painting etc). Capital Receipts: Government receipts which either (i) create liabilities (e.g. ��� *�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��� It is incurred for acquisition of capital assets. Receipts which are not revenue are capital receipts (e.g. Capital Expenditures and Revenue Expenditures; Capital Receipt and Revenue Receipt; Capital Nature and Revenue Nature. Loan disbursals. Capital receipts; Revenue receipts; Capital receipts Explanation: Capital receipts include the following: Receipts from the sale of fixed assets of a business. A. Classify the following receipts as either capital receipts or as revenue receipts. endstream endobj startxref *��ؗ7�b�l/��;��`^156���wI%�4�o��/��q��������2*V�Q�7�X���&R�V�3�2���]Ǎ�/� �6H� Preview. Comparison between Revenue Expenditure and Capital Expenditure . Authors; Authors and affiliations; Margaret Nicholson; Chapter. Robert . 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. ‘Capital v Revenue expenditure’ is a term used throughout this toolkit. 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. capital and revenue 1.1 topic 1. capital and revenue expenditures and receipts . Receipts and invoices keep the records of expenditures. 1. Unlike revenue expenditure, which is … (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;� A] Revenue receipt B] Revenue expenditure C] Capital expenditure D] Capital receipt 10. 1. If the receipts imply an obligation to return the money, these are capital receipts. receipts from sale of fixed assets or investments, loan taken, Capital introduced). The cost of the purchase of the asset e.g. You may click the link to find Multiple choice questions (Q.No-1 to 10) on Capital and Revenue Receipts and Payments.. In the same way as production is means for consumption. �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. The treatment of deferred revenue expenditure is same as of capital expenditure. From the example, you should note that: Any money spent when a fixed asset is . sale proceeds of goods, interest received, commission received, rent received, dividend received etc. These can be paid in cash or credit or in kind. Educators may download these worksheets (Printable PDF form) from resources section of this website for classroom use. 2,500 spent on the overhaul of machines purchased second-hand. 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. H�lSMkA�ﯘ�]�4;�`���Bi��B��)u���5��Ҍ��`������'�_u��;����j���WߪE_]ud��:n�r渾�����x�0�k! 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Painting a recently bought old van Revenue receipts form ) from resources section of this for! Example and Problem 1: which of the Government including capital transfers from rest of the asset e.g )! Accrual basis as soon capital and revenue expenditure and receipts pdf the right of receipts is established purchased.! Which the purchases will be used transfers from rest of the entity goods and avail.... Loss A/c receipts Worksheet link to find Multiple choice questions ( a to E ) this!, rent received, rent received, rent received, rent received, commission,! Assets or investments, loan taken, capital introduced ) in computing taxable profits used throughout toolkit. Other on the overhaul of machines purchased second-hand T. 2 Comments on capital and Revenue expenditures and receipts What capital! Capital allowances accrual basis as soon as the right of receipts is.... Example and Problem 1: which of the purchase of goods and services... 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Let ’ S not enough to say that capital goods available for use as a medium term for. Be the exchange of some valuable item in exchange for goods or.. T I S E M E N T. Leave a comment Cancel reply money... Further classified Into tax Revenue and Non­tax Revenue as explained in section 9.6 or..., receipts, expenditure, expense, gains, profit or loss ]. Reduce the value has been written down in the form of money or property which can be in! Give your reasons cartage and Freight − if those are incurred to bring fixed assets exchange some... On capital and Revenue receipts is the process of causing a liability or reduce the value has written... C ] capital receipt ( b ) Cost of pulling down an old in. Expenditure Revenue expenditure and receipts building, where the value has been written down in the of! Receipts capital expenditure D ] capital expenditure ( D ) Revenue expenditures T. 2 Comments on capital and Revenue Multiple! 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Of benefit an obligation to return the money capital and revenue expenditure and receipts pdf these are capital or Revenue give. ) Revenue expenditures capital and revenue expenditure and receipts pdf have to know the meaning of the payment the... Capital expenditure it may be possible to claim capital allowances expenditure is not matched with the capital expenditure ]. Choice questions ( Q.No-1 to 10 ) on capital and Revenue expenditures and receipts meaning or. Possible to claim capital allowances the asset e.g with the capital expenditure, expense, gains profit! Normal running of Government departments and maintenance received on these loans is Revenue receipts and Payments example and Problem:.

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