![]() ![]() Insurance claim from any damaged machineryĭifference between revenue and capital receipts.Money received from the debenture holders.These receipts are termed as non-tax receipts unless there is any provision to tax them. These are both debt and non-debt receipts. Loans from the general public, financial institutions, or banks form a crucial part of the capital receipts. So, it’s clear that any receipt is called a capital receipt if it adheres to the below conditions: What are capital receipts?Ĭapital receipts create liabilities or reduce the asset of an organization. This was all about revenue receipts let’s move ahead to capital receipts to understand the difference between the two. This could exceed any other kinds of receipts i.e. For a company selling hundreds of thousands of products in a year, the revenue receipts generated would be very high in number. ![]() But they are nevertheless smaller in any way. Smaller volume – The number of revenue receipts is smaller as compared to the capital receipts.Whenever revenue is received, it means either the loss is reduced, or profit is increased. Effects on the profit and loss – Receiving revenue affects the profit/loss of any organization.The advantage of such receipts is that they are valid only for one accounting year. Applicable for the short term – Revenue receipts include the money which is received for a short period of time.Recurring – Revenue receipts offer benefits for a shorter period, but these are recurring.In the absence of revenue receipts, a business can’t sustain for long as these are collected from the direct activities of the business. Method of sustaining – Any business begins its operations in expectation of receiving money for providing products or services to the customers.The main sources of non-tax receipts are dividends, profits, fees, interests, fines, and external grants. Income from sources other than taxes is referred to as non-tax revenue. Tax revenue is the major source of the revenue receipts of the government. It doesn’t have any reference to any kind of direct benefit. Tax is an important and mandatory payment done by the payer, and organizations to the government. Tax revenue refers to the total receipts from taxes or other government duties. Revenue receipts of government are classified under two categories Tax revenue Non-tax revenue Tax revenue So, revenue receipts have a long-lasting effect on the profits/incomes generated by an organization. Revenue earned by any waste or scrap material, etc.Discount received from the vendors, suppliers, or the creditors.Money received from goods and services provided to the clients.For example- any receipt from a sale of investments is not revenue receipt as the stake sale leads to the reduction in the assets. No reduction in assets – The receipt must not cause any decrease in the assets of the business.Any kind of borrowing/loan is not a revenue receipt. ![]()
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