Question
Explain differences: Capital income and Revenue income:
✓
Answer
| Point | Capital Income | Revenue income |
| $1.$ Meaning | Income of concerns which is not regularly received as well as the benefit of which available to the concern for a longer period of time and which capitalized is known as capital income. | Income of concerns which is regularly received and arising from the activities of the concern is known as Revenue Income. |
| $2.$ Objective | The objective of capital income is to procure long term fund. | The objective of revenue income is to procure regular income |
| $3.$ Presentation in accounts | Capital income is disclosed on the liability side of the balance sheet. | Revenue income is disclosed on the credit side of the income- expenditure account. |
| $4. $ Balance | Every year the balance of capital income is carried forward. | Revenue income is transferred to the income expenditure account. |
| $5.$ Give information | From capital income, know the financial condition of the concern. | From revenue income, know the profit or loss of the concern. |
| $6.$ Example | Capitalized legacy, donation for specific purpose, charity income from sale of asset etc. | Subscription, lockers rent, sale of old news papers, rent of hall etc. |
Need a full question paper?
Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.
Explore more
Similar questions
Explain the concept of dual aspect with example.
Make classification of account type for the following :
(Interest received account, Dividend received account, Goodwill account, Bills receivable account, Stock account, Purchase account, Bhavnagar Branch account, Rotary club account, Bad debts return account, Outstanding rent account, Building account, Income tax account)
(Interest received account, Dividend received account, Goodwill account, Bills receivable account, Stock account, Purchase account, Bhavnagar Branch account, Rotary club account, Bad debts return account, Outstanding rent account, Building account, Income tax account)
From the following transactions, prepare columnar sales book in the books of Shri Durgesh Electronics stores :
$2018$
Dec.
$1$ Sold to Laukik Electronics Stores $10$
$AC$ at $₹ 30,000$ per piece, $6$ cooler at $₹ 6000$ per piece and $100$ fans at $₹ 1400$. Trade discount at $10 \%$, credit period $2$ months. Invoice no. $151.$
$12$ Sold to Aanand Electronics $8$
$AC$ at $₹ 28,000$ per piece and $15$ fans at $₹ 1300$ per piece. Trade discount at the rate of $10 \%$, credit period $1$ month. Invoice no. $152.$
$15$
$10$ cooler sold to Sangharsh Electronics at $₹ 6500$ per piece on cash. Cash memo no. $153$.
$18 $Sold to Krishna Enterprise to $10$ cooler at $₹ 6200$ per piece and $15$ fans at $₹ 1400$ per piece, at $5 \%$ trade discount. Credit period for $1$ month. Invoice no. $154.$
$20$ Sold old furniture of shop at $₹ 8000$ to Khyati.
→$2018$
Dec.
$1$ Sold to Laukik Electronics Stores $10$
$AC$ at $₹ 30,000$ per piece, $6$ cooler at $₹ 6000$ per piece and $100$ fans at $₹ 1400$. Trade discount at $10 \%$, credit period $2$ months. Invoice no. $151.$
$12$ Sold to Aanand Electronics $8$
$AC$ at $₹ 28,000$ per piece and $15$ fans at $₹ 1300$ per piece. Trade discount at the rate of $10 \%$, credit period $1$ month. Invoice no. $152.$
$15$
$10$ cooler sold to Sangharsh Electronics at $₹ 6500$ per piece on cash. Cash memo no. $153$.
$18 $Sold to Krishna Enterprise to $10$ cooler at $₹ 6200$ per piece and $15$ fans at $₹ 1400$ per piece, at $5 \%$ trade discount. Credit period for $1$ month. Invoice no. $154.$
$20$ Sold old furniture of shop at $₹ 8000$ to Khyati.
The following balances of $31-3-2015$ are disclosed in the balance sheet of Ahmedabad cricket club.
→On $1—8—2016$ Shahid drew a four months bill of? $60,000$ on Kapoor, which Kapoor accepted and returned. On $28-9-2016$ Kapoor was declared insolvent and on $20-10-2016$, his receiver paid dividend at $60$ paise. Write a journal entries in the books of Shahid.
→Write journal entry for each transaction and explain its accounting treatment of individual transaction as per equation method :
Goods of $₹ 2000$ returned back to Ramesh.
→Goods of $₹ 2000$ returned back to Ramesh.
Write journal entry for each transaction and explain its accounting treatment of individual transaction as per equation method :
$₹ 6500$ withdrawn from bank.
→$₹ 6500$ withdrawn from bank.
Classify the following accounts: $1$. Bad-debts recovered account $2.$ Dividend received account $3.$ Borrowed loan account $4.$ Interest on borrowed loan account $5$. Fire insurance premium account $6$. Gala Book Store’s account
→Give the meaning of reserve.
Give the specimen of debit note.