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Difference Between Capital and Revenue Receipts
Last Updated On: 31-Oct-2021Posted On: 31-Oct-2021
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[color=#ffffff; font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen-Sans, Ubuntu, Cantarell, 'Helvetica Neue', sans-serif; font-size: 20px; font-style: italic; background-color: #e03e2d]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.[/color][size= 14.0pt; mso-fareast-font-family: 'Times New Roman'; mso-bidi-font-family: 'Segoe UI']Receipts are just the opposites of expenses. But without receipts, there may be no existence of the business. Not all receipts directly increase the profits or decrease the loss. But some affect the profit or loss directly.[/size]
[size= 14.0pt; mso-fareast-font-family: 'Times New Roman'; mso-bidi-font-family: 'Segoe UI']In this article, we will be talking about capital receipts and revenue receipts. In simple terms, capital receipts don’t affect the profit or loss of the business; for example, we can say that the sale of long-term assets is one sort of capital receipts.[/size]
[size= 14.0pt; mso-fareast-font-family: 'Times New Roman'; mso-bidi-font-family: 'Segoe UI']But revenue receipts affect the profit or loss of a company. As an example, we can say that the sale of products, the commission received, etc. are revenue receipts.[/size]
[size= 14pt]The nature and function of capital receipts and revenue receipts are completely different. In this article, we will do a comparative analysis of capital receipts vs. revenue receipts.[/size]
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