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Write the note on receipt |
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Answer» :The similar treatment is given to the RECEIPTS of the business. If the receiptsimply an obligation to return the money, these are capital receipts. The examplecan be an ADDITIONAL capital brought in by the owner or a loan taken from thebank. Both receipts are leading to OBLIGATIONS, the first to the owner (calledequity) and the other to the outsiders (CALLED liabilities). Another example on a capital receipt can be the sale of a fixed asset like old MACHINERY or furniture.However, if a receipt does not incur an obligation to return the money or isnot in the form of a sale of fixed asset, it is termed as revenue receipt. Theexamples of revenue receipts sales made by the firm and interest on investmentreceived by the firm. |
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