Everything related to Capital and Revenue Receipts, and Capital and Revenue Expenditure along with their differentiation and examples.

1. RECEIPTS AND
EXPENDITURES
PRESENTED TO: MR. AYUSH KANSAL PRESENTED BY: SWASTI CHATURVEDI
B.B.A. LL.B. VIII SEM
SECTION- ‘B’

2. INTRODUCTION
• 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.
• Expenditure is an outflow of money, or any form of fortune in general, to another person or group to
pay for an item or service, or for a category of costs. For a tenant, rent is an expense. For students or
parents, tuition is an expense.

3. CAPITAL RECEIPTS
Income received by the company.
It is non-recurring in nature.
Are part of the financing and investing activities rather than
operating activities.
Either reduces an asset or increases a liability.

4. REVENUE RECEIPTS
Receipts which
arise through
the core
business
activities.
Are a part of
normal
business
operations.
Occur again
and again.
Its benefit can
be enjoyed only
in the current
accounting year
as its effect is
short term.

5. DIFFERENCE BETWEEN CAPITAL
AND REVENUE RECEIPT
BASISFORCOMPARISON CAPITALRECEIPT REVENUERECEIPT
Meaning CapitalReceiptsaretheincomegenerated
frominvestmentandfinancingactivitiesof
thebusiness.
RevenueReceiptsaretheincomegenerated
fromtheoperatingactivitiesof the business.
Nature Non-Recurring Recurring
Term LongTerm ShortTerm
Shownin BalanceSheet IncomeStatement
Receivedinexchangeof Sourceof income Income
Valueof assetor liability Decreasesthevalueof assetor increasesthe
valueof liability.
Increasesor decreasesthevalueof assetor
liability.

6. CAPITAL EXPENDITURE
Often used for
buying fixed assets

7. REVENUE EXPENDITURE
Are recorded on
the income
statement.
Subtracted from
the revenue that
a company
generates.
Can be fully tax-
deducted in the
same year the
expenses occur.

8. DIFFERENCE BETWEEN CAPITAL
AND REVENUE EXPENDITURE

9. EXAMPLES
Capital Receipts
Example: 1
Sale of fixed
assets
Revenue
Receipts
Example: 2
Dividend
received
Capital
Expenditure
Example: 3
Buildings
(including
subsequent
costs that extend
the useful life of
a building)
Revenue
Expenditure
Example: 4
Salaries and
employee wages

10. CONCLUSION
• In general, Capital Receipts and Revenue Receipts play a vital role in the growth of business, as the
business may not be able to survive, in the absence of the two.
• Both capital expenditure and revenue expenditure are vital for the sustainable profitability of a
business venture. Mostly, revenue expenses are a periodic investment which does not result in
immediate or delayed benefit. However, it is used to keep operations running uninterruptedly.