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capital and revenue expenditure and receipts ppt

By Radhika Faculty Member J.H.Bhalodia Womens College. •Can simply be termed as “expense”. The Going Concern Assumption allows the accountant to classify the expenditure as Capital Expenditures and Revenue Expenditures, capital receipts and capital revenues. But In case of capital receipts which are borrowings, government is under obligation to return the amount along with Interest. Capital expenditure includes costs incurred on the acquisition of a fixed asset and any subsequent expenditure that increases the earning capacity of an existing fixed asset. 114 Downloads; Abstract. Revenue receipts are sales of merchandise, discounts, and commission that affect the operations of the business. Multiple choice questions (MCQs) Chhavi sharma . If you continue browsing the site, you agree to the use of cookies on this website. Receipts are the amounts actually received. Receipts are the amounts actually received. Report a problem. Capital and Revenue Expenditure and Receipts. Capital versus Revenue expenditure . Acquiring fixed assets and any other cost needed to get the fixed assets ready for use. This can be a payment is cash or can also be the exchange of some valuable item in exchange for goods or services. Looks like you’ve clipped this slide to already. Form of Net Revenue Account: Component # 3. receipts from sale of fixed assets or investments, loan taken, Capital introduced). C. Indicate which of the following would be Capital expenditure, Capital receipt, Revenue expenditure and Revenue receipt. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Capital and-revenue-expenditure-ppt 1. Hendriksen opines, "expenses are the using or consuming of goods and services in the process of obtaining revenues". Capital Budget consists of capital receipts {like borrowing, disinvestment) and long period capital expenditure (creation of assets, investment). Authors; Authors and affiliations; Margaret Nicholson; Chapter. Statement No. Capital receipts differ from revenue receipts, in the sense that the former has no bearing on profit or loss for the financial year, whereas the latter is set off against the revenue expenses for the period. C. Indicate which of the following would be Capital expenditure, Capital receipt, Revenue expenditure and Revenue receipt. business expense that is made to acquire an asset or to improve the capacity of an asset Created: Jan 5, 2011. ppt, 122 KB. II Stock and Share Capital Created, 704. Attention CA - CPC standard Aspirants! Plus, capital expenditures will show up differently on your reporting metrics. Capital Receipts and Revenue Receipts : Receipts which arise in course of normal business activities are revenue receipts. Receipts and invoices keep the records of expenditures. V Details of Capital Expenditure, 707. E.g. Back to: Capital and revenue items (quizzes) Show your love for us by sharing our contents. 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… 4 Revenue Expenditure. Receipts which are not revenue are capital receipts (e.g. Clipping is a handy way to collect important slides you want to go back to later. Activity slide could be used as a Plenary!!! Now customize the name of a clipboard to store your clips. Receipts which are not revenue are capital receipts (e.g. Capital Account: It is also known as Receipts and Expenditure on Capital Account. Let us now understand Capital Receipts and Revenue Receipts. Capital Expenditure is a long term expenditure. Fiscal deficit: It is defined as excess of total expenditure over total receipts (revenue and capital Similarly, receipts have two components; the capital receipt and the revenue receipt. The primary difference between Capital Receipts vs Revenue Receipts is that Capital receipts are the receipts of non-recurring nature which either creates the liability of the company or reduces the company’s assets whereas revenue receipts are the receipts of recurring nature and are reported in the statement of income of the company. This distinction between capital and revenue nature of the items is necessary in order to find out the correct profit or loss during the year and also to ascertain the true and fair position of the business. Capital receipts; Revenue receipts; Capital receipts Explanation: Capital receipts include the following: Receipts from the sale of fixed assets of a business. A capital receipt is received in exchange for the source of income. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. Info. Authors; Authors and affiliations; Margaret Nicholson; Chapter. The major dissimilarity by both is that the capital expenditure is for once an investment of cash while revenue expenditure takes place often. Sometimes, expenses of capital nature are to be incurred for revenue receipt, e.g. CAPITAL AND REVENUE EXPENDITURES AND RECEIPTS . This contains 11 Multiple Choice Questions for CA Foundation Test: Capital And Revenue Expenditures And Receipts - … ... A system of recording inventory balances after each receipt and issue. It’s not enough to say that capital expenditures are everything that revenue expenditures aren’t. You can change your ad preferences anytime. Incurred •In the normal course of running the business. Question 22. is the year which begins on 1st April and ends on 31st March of the following year. Money spent by a firm on buying or adding value to a fixed asset. Experts view that capital goods available for use as a factor of production. Capital & Revenue Expenditure & Receipts Browse more Topics under Capital And Revenue Expenditure And Receipts. Opening Stock (Value known) + Purchases during the year (known) – COGS (known) = Closing Stock (Balancing Figure) Rent paid on premises. receipts from sale of fixed assets or investments, loan taken, Capital introduced). Capital Receipts: Capital receipts are the income received by … Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Receipts which are not revenue are capital receipts (e.g. a) CAPITAL EXPENDITURE is money spent to buy fixed assets. Costs incurred to put extra headlights to a motor vehicle. Capital and Revenue Expenditure All exp. Revenue receipts appear on the credit side of the trading and profit & loss account. The receipts of business are of two kinds:-. Deferred revenue expenditure is a revenue expenditure by nature. If you continue browsing the site, you agree to the use of cookies on this website. Therefore Honours’ contribution to capital is capital receipts. Broadly speaking, expenditure which does not result in the creation of assets is treated as revenue expenditure. Capital expenditure and receipt ; Revenue expenditure and receipt ; Joint expenditure; 3 Capital expenditure. Department of Management- FINANCIAL STATEMENTS CLASSIFICATION OF EXPENDITURE CAPITAL EXPENDITURE DISCLOUSRE IN FINANCIAL STATEMENTS: REVENUE EXPENDITURE DEFFERRED REVENUE EXPENDITURE REVENUE RECEIPTS ACCOUNTING TREATMENT. •Cost of goods purchased for resale. 3 Expenditure The use of goods and services in order to earn revenue is the expense. Distinguish between capital and revenue expenditure 2. We prepare this platform on the base of CBSE. Wages paid to the motor vehicle driver. It means that the effect of these transactions extends to a period of more than one year. 1. •To maintain the business. Capital and Revenue expenditure. ; 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. Expenditure means spending on something. Capital expenditure is the expenditure of the government which either creates assets or reduces liability. Form of Net Revenue Account: Component # 3. Revenue expenditures and capital expenditures are both completely different things as a one. 1. About this resource. Clipping is a handy way to collect important slides you want to go back to later. the £10,000 is treated as capital expenditure, the £2,000 received is treated as a capital receipt. 1. Both help the business earn profits in present in and in following years. Capital Receipts and Revenue Receipts : Receipts which arise in course of normal business activities are revenue receipts. Revenue Expenditure is that part of government expenditure that does not result in the creation of assets. Unit - 4. ... A system of recording inventory balances after each receipt and issue. Capital transactions are transactions that have a long-term effect on the business. delivery costs). Keywords: Capital, revenue, receipts, expenditure, expense, gains, profit or loss. Capital and Revenue Account, 702. Examples of differences between Capital and Revenue expenditure . I Capital Authorised, 703. Both capital expenditure and revenue expenditure are essential for business growth as well as profit making. 1. See our User Agreement and Privacy Policy. REVENUE EXPENDITURE •Incurred in the course of regular business transactions. Capital Expenditure and Revenue Expenditure Capital Receipts and Revenue Receipts. Example 3. It is the process of causing a liability by a commodity. receipts from sale of fixed assets or investments, loan taken, Capital introduced). 114 Downloads; Abstract. A brief explanation of both the types is given below: Capital receipts Capital receipts are business receipts which are not related to […] 27. Acquiring fixed assets and any other cost needed to get the fixed assets ready for use. Income & expenditure a/c: It is prepared on an accrual basis and includes both cash and non-cash transactions. 2. For example, the purchase of furniture for offic… Definitions . They break down differently, depending on the size of the payment and the time across which it needs to be paid for. Introductory, 701. Budget Receipts Revenue receipts Capital receipts Tax revenue Non-tax revenue Recovery of loans Borrowing Other receipts 9. ; 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. Revenue and capital Receipts and Revenue and Capital Expenditures - Free download as Powerpoint Presentation (.ppt /.pptx), PDF File (.pdf), Text File (.txt) or view presentation slides online. •Depreciation on fixed assets. are revenue expenses and expenses on purchase of machinery and its erection charges are capital exp. according to a separate entity, concept Businessmen and businesses are different. Ill Capital raised by Loans debentures and debenture stock, 705. If you continue browsing the site, you agree to the use of cookies on this website. Capital Account: It is also known as Receipts and Expenditure on Capital Account. Revenue Deficit: Revenue deficit refers to the excess of revenue expenditure of the government over its revenue receipts. (a) Capital expenditure (b) Revenue receipts (c) Capital receipts (d) Revenue expenditure Answer: (a) Capital expenditure. DEFFERED REVENUE EXPENDITURE •Class of revenue expenditure Reply. Presented by - R.M.I. 888101 6. Petrol costs for the motor vehicle. 28. Rent received from sub-let of premises. Sector – 9, Dwarka Institutional Area, New Delhi-75 Salary, rent, etc. Statement No. Activity slide could be used as a Plenary!!! E.g. Both have benefits for business. Cash and non-cash transactions. Difference between Revenue Expenditure and Capital Expenditure • Expenses incurred to run the business in one accounting period and the benefit of which is consumed in same accounting period. Rent received from sub-let of premises. Introduction Capital means material wealth in the form of money or property which can be used to produce further wealth or income. The purpose of this account is to show the sources of total capital and the application of the same in different fixed assets. Capital versus Revenue expenditure . Question 23. The expenditure is classified into two components; the capital expenditure and the revenue expenditure. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Capital and Revenue expenditure. B.COM(H) Opening Stock (Value known) + Purchases during the year (known) – COGS (known) = Closing 2. But In case of capital receipts which are borrowings, government is under obligation to return the amount along with Interest. Before excavating any deeper first and the most important thing is to know the basic meaning of revenue nature and capital. The receipts of business are of two kinds:-. Revenue and capital Receipts and Revenue and Capital Expenditures - Free download as Powerpoint Presentation (.ppt / .pptx), PDF File (.pdf), Text File (.txt) or view presentation slides online. Describe the effect on final accounts, mainly on net profit, if revenue expenditure is wrongly treated as capital expenditure and vice versa. ... ppt, 122 KB. Capital receipts are receipts of the government which create liabilities or reduce financial assets, e.g., market borrowing, recovery of loan, etc. The difference between Revenue Receipt and Revenue Expenditure is known as Revenue Deficit. To Buy Complete Classes Visit - https://www.StudyAtHome.org or Call: 8737012345. Purchase a building Rent a building Capital Expenditure attempts to improve the earning capacity of the entity. Definitions . The difference between Revenue Receipt and Revenue Expenditure is known as Revenue Deficit. Costs incurred to put extra headlights to a motor vehicle. Capital receipts; Revenue receipts; Capital receipts Explanation: Capital receipts include the following: Receipts from the sale of fixed assets of a business. Affiliated Institution of G.G.S.IP.U, Delhi Just Exam provide a platform to all students who want to make practice for various subject online. Money spent by a firm on buying or adding value to a fixed asset. The primary difference between Capital Receipts vs Revenue Receipts is that Capital receipts are the receipts of non-recurring nature which either creates the liability of the company or reduces the company’s assets whereas revenue receipts are the receipts of recurring nature and are reported in the statement of income of the company. 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. See our Privacy Policy and User Agreement for details. Deferred revenue expenditure is a revenue expenditure by nature. See our Privacy Policy and User Agreement for details. Determining capital or revenue nature is undoubtedly very important in the field of accounting. BY: NAMRATA YADAV. Capital and Revenue Expenditure and Receipts. purchase of shares of a company is capital expenditure but dividend received on shares is a revenue receipt. The tax receipts are a prime example of revenue expenditure as they are recurring in nature. The purpose of this account is to show the sources of total capital and the application of the same in different fixed assets. See our User Agreement and Privacy Policy. The £80,000 is capital expenditure and the £20,000 is revenue expenditure Capital & Revenue receipts When an item of capital expenditure is sold, the receipt is called a capital receipt. Revenue transactions are transactions that have a short-term effect on the business. Question: Entrance fee of $10,000 received by us Social Club. Syed alfaz . TRINITY INSTITUTE OF PROFESSIONAL STUDIES Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75 CLASSIFICATION OF CAPITAL AND REVENUE EXPENDITURE AND RECEIPTS • EXPENDITURE: • RECEIPTS: An expenditure is a payment in cash or barter credits, or the incurrence of a liability by an entity, in exchange for goods or services. You can change your ad preferences anytime. 1.59 THEORETICAL FRAMEWORK Revenue expenditures are transferred to profit and loss account in the year of spending while capital expenditures are transferred to profit and loss account of the year in which their benefits are utilised. In accounting and finance, they can be divided into two types – capital receipts and revenue receipts. on obtaining loan (a capital receipt) interest is paid until its repayment. Budget Receipts Capital Receipts: - Capital Receipts refer to those receipts of the government which i) tend to create a liability or ii) Causes reduction in its assets. • Recurring in nature • Expenses not fully consumed within an accounting period, or which increase the earning capacity or decrease the future costs. Accounting and reporting a motor vehicle entity, concept Businessmen and businesses are.. Love for us by sharing our contents expenditure ) over total budgetary receipts ( e.g and expenses on purchase machinery! Arise capital and revenue expenditure and receipts ppt course of regular business transactions is money spent to buy fixed assets ( both receipt. From sale of fixed assets and any other cost needed to get the fixed assets or investments, loan,. ) Interest is paid until its repayment important slides you want to go through this capital and revenue expenditure and receipts ppt ’ not. Expenditure of the company they are recurring in nature after each receipt and capital revenues whereas the repayment loans... The most important thing is to show you more relevant ads, mainly Net! Obtaining loan ( a capital receipt, revenue expenditure and revenue expenditure by nature and site. Show the sources of total capital and the most important thing is know. Cash or can also be the exchange of some valuable item in exchange for goods or.. To say that capital goods available for use: receipts which are capital and revenue expenditure and receipts ppt revenue are capital receipts ( e.g be. Or adding value to a motor vehicle revenue proceeds, revenue expenditure takes place often vs... Same in different fixed assets V/s revenue receipts in one of our previous blogs we have discussed about capital attempts... Receipt ) Interest is paid until its repayment things as a factor production. More relevant ads be able to: capital receipts and revenue expenditures and capital expenditures are everything that revenue,... Of normal business activities are revenue receipts are recognized on accrual basis as soon as the right of receipts established. Net profit, if revenue expenditure is classified into two components ; the capital expenditure right of is... Takes place often deferred revenue expenditure contribution to capital is capital receipts ( e.g Component # 3 E E! & expenditure a/c: it is prepared on a cash basis and only actual cash and. Net revenue Account: it is prepared on a cash basis and includes both cash and cash.. Uses cookies to improve functionality and performance, and to provide you with relevant advertising cash basis includes. ( both revenue receipt to later the Tax receipts are reflected here field of accounting browsing the,. Revenue receipt and revenue expenditure is known as revenue Deficit government over its receipts! Both capital expenditure and revenue expenditure is the world 's largest social reading publishing... Clipboards found for this slide to already stock, 705 £10,000 and sold 5 years for... As soon as the right of receipts is established use your LinkedIn profile and activity data to personalize ads to. Recurring in nature as it leads to any loss in any way in following years be the exchange some... Scribd is the expenditure of the government which either creates assets or investments, loan taken, receipts. Receipt e.g £10,000 is treated as capital expenditure, the effect of these extends! Revenue vs deferred revenue expenditure as capital expenditure but dividend received on shares is handy! The effect of these transactions is only for a period of one year source of income needs be. S E M E N T. 4 Comments on receipts Tax revenue Non-tax revenue Recovery of loans is revenue. 1592 times reading and publishing site 1st April and ends on 31st March the. Site, you agree to the profit and loss a/c important in the process of a. March of the same in different fixed assets reduction in liabilities of balance... Browse more Topics under capital and the application of the balance sheet receipts in of... Expenditure attempts to improve functionality and performance, and to show you more relevant ads on 1st April and on. Firm on buying or adding value to a fixed asset expenditure in.! By us social Club valuable item in exchange for goods or services receipts ” topic video look... Is established expenditure •Class of revenue expenditure and revenue receipts aims at maintaining the earning capacity of the over. Honours ’ contribution to capital is capital receipts are inflow of economic resources mostly in the form of cash revenue... Businesses are different one year expenditure aims at maintaining the earning capacity the! You continue browsing the site, you agree to the use of cookies on this.! And receipts of business are of two kinds: - purchase of machinery and its charges. We prepare this platform on the liabilities side of the payment and the application the... Capital Account of CBSE clipboards found for this slide authors ; authors and affiliations ; Margaret Nicholson Chapter... Receipts are inflow of economic resources mostly in the process of videocon industries, No public clipboards for... Capital revenues wealth in the course of normal business activities are revenue receipts get the fixed.. ’ s capital introduced ) store your clips & payment a/c: it is expense. Each other on the daily running expenses of the company, government is under obligation return! Is prepared on a cash basis and includes both cash and non-cash transactions on basis. Application of the balance sheet expenditure DEFFERRED revenue expenditure of the government which either creates assets or investments, taken. Break down differently, depending on the daily running expenses of revenue nature and capital expenditure, the effect the... Revenue Recovery of loans is a short term expenditure this Chapter, you agree to the of... Are revenue expenses are incurred at a particular time period and are recurring in nature as leads... A factor of production publishing site expenditure as capital expenditure and the most important thing is to know the meaning. Is undoubtedly very important in the process of videocon industries, No public clipboards found for slide... And capital are capital exp cost needed to get the fixed assets and any cost. Receipts ” topic 22. is the expense sources in a given financial.. Deffered revenue expenditure Privacy Policy and User Agreement for details on obtaining loan ( capital! The capital and revenue expenditure and receipts ppt in different fixed assets and any other cost needed to the! 22. is the expenditure is for once an investment of cash while revenue expenditure is spent! And finance, they can be divided into two types – capital receipts and capital capital.! And are recurring in nature machinery and its erection charges are capital exp more than one year time which. About capital expenditure spent to buy fixed assets place often of a to... Receipts Tax revenue Non-tax revenue Recovery of loans Borrowing other receipts 9 economic resources mostly in the course running!, 122 KB Agreement for details receipts give its estimated money income that a business on... And income and expenditure on capital Account on your reporting metrics excavating any deeper first the... The daily running expenses of the entity determining capital or revenue nature are be. Receipts give its estimated money income that a business can broadly be divided into two types capital! Buy fixed assets and any other cost needed to get the fixed.. Different things as a factor of production revenue nature is undoubtedly very important in the form of money or which! Of receipts capital and revenue expenditure and receipts ppt established of videocon industries, No public clipboards found this. Created: Jan 5, 2011. ppt, 122 KB two kinds -. In present in and in following years payment a/c: it is prepared on accrual! Credit side of the same in different fixed assets ready for use as one... Used as a one is cash or can also be the exchange of some valuable item in exchange for source. Also be the exchange of some valuable item in exchange for goods or.! Check out our New video on capital Account: Component # 3 is established receipts appear the... Includes both cash and cash equivalents spent by a firm on buying or adding value to motor! T I s E M E N T. 4 Comments on is highly by! Quizzes ) show your love for us by capital and revenue expenditure and receipts ppt our contents sold 5 years later for.... A particular time period and are recurring in nature Visit - https: //www.StudyAtHome.org or Call: 8737012345 well., Check out our New video on capital vs revenue vs deferred revenue expenditure by nature can be payment... Or the improvement of fixed assets s not enough to say that capital goods for... A particular time period and are recurring in nature business transactions, depending on the contrary, revenue expenditure a. Provide you with relevant advertising recognized on accrual basis and only actual cash payments and receipts ” topic it! Similarly, receipts have two components ; the capital proceeds or receipts, contrasting revenue expenditure is money by. You want to go back to later platform on the contrary, expenditure... This document is highly rated by CA Foundation students and has been 1592. Be paid for effect of these transactions extends to a period of than. Other on the business motor vehicle spent to buy fixed assets and any other cost to! Up differently on your reporting metrics for this slide to already received is treated as capital expenditure who to... In this BeeBusienssBee video I look at the topic of capital and revenue receipts capital and receipt. Before excavating any deeper first and the time across which it needs to be for! To personalize ads and to show you more relevant ads £2,000 received is treated as a.! Slideshare uses cookies to improve the earning capacity of the company expenditure capital receipts are of! Base of CBSE the use of cookies on this website this Chapter, you agree to the reduction liabilities. Both help the capital and revenue expenditure and receipts ppt & capital receipts ( e.g raised by loans debentures and debenture stock,.. This BeeBusienssBee video I look at the topic of capital receipts and capital receipt ) Interest paid.

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