Difference between Capital Receipt and Revenue Receipt
Capital Receipts do not regularly happen, as it is non-recurring and uneven. But, revenue receipts do not happen over again and again they are recurring and usual. The advantage of capital receipt can be enjoyed in more than one year, but the advantage of revenue receipt can be enjoyed only in the existing year.
Capital Receipt
- Capital Receipts are the income generated from investment and financing activities of the business.
- Long Term
- Show in Balance Sheet
- Non-Recurring in nature
- Decreases the value of asset or increases the value of liability.
- Sometimes expenses of revenue nature are to be incurred for such receipt e.g. on obtaining loan (a capital receipt) interest is paid until its repayment.
Revenue Receipt
- Revenue Receipts are the income generated from the operating activities of the business.
- Short Term
- Show in Income Statement
- Recurring in nature
- Increases or decreases the value of asset or liability.
- Sometimes, expenses of capital nature are to be incurred for revenue receipt, e.g. purchase of shares of a company is capital expenditure but dividend received on shares is a revenue receipt.
