Difference between Capital Receipts and Revenue Receipts

Difference between Capital Receipts and Income Invoices: Receipts which are not of income nature are capital receipts.The Invoices which are not gotten now and then can be treated as capital receipt. The distinction of transaction into earnings and capital is done for the function of putting them in Earnings and Loss account or in the Balance Sheet. For instance: revenue expenses are shown in the revenue and loss account as their advantages are for one accounting period i.e. in which they are sustained while capital expenditures are placed on the property side of the balance sheet as they will generate benefits for more than one accounting duration and will be moved to profit and loss account of the year on the basis of utilisation of that benefit in specific accounting year. Both capital and earnings expenses are ultimately moved to benefit and loss account.

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Content in this Short Article.

Capital and Income Receipts Examples:

Capital Invoices:

  • Share capital contributed by the share holders/ members.
  • Loans raised
  • Earnings from sale of set possessions.
  • Life membership charges in the case of clubs and associations.

    Revenue Invoices:

  • Discounts, commissions got.
  • Donations which are general in nature.
  • Sale of old news papers.

    Capital Receipts

  • They are shown inside a balance sheet.
  • They are not offered for distribution of profits.
  • Capital receipts are not gotten by the regular course of company operations.

    Earnings Invoices

    • Income invoices are amounts gotten by a business as a result of its core activities. These are funds created from a company’s operating activities for this reason are disappointed inside the balance sheet.
    • They are revealed on the credit side of Trading and Earnings & Loss Account.
    • They are repeating in nature and can be seen on a regular basis.
    • They are offered for circulation of revenues.
    • Income invoices are gotten by the regular course of organization operations.
    • Examples — Sales (stock), Sales (services rendered), Discount rate received from financial institutions or providers, Sale of scrap, Interest made, Dividends received, Lease got, etc.

    Difference between Capital Receipts and Revenue Invoices:

    S.No Capital Invoices Earnings Receipts
    1 Amount understood by the sale of fixed assets or by concern of shares or debentures is a capital invoice.
    3 Amount got for surrender of particular rights under a contract is a capital invoice, because a capital property is being given up in the type of these rights.
    5 Amount understood from the sale of a capital asset or investment is capital receipt.


    • Accrued Liabilities
    • Limitations of Accounting
    • Devaluation Guidance Note
    • Capital Structure
    • Book Keeping
    • Interest on Capital
    • Accounting Estimates
    • Double Entry System
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