What is the Difference Between Capital Receipts and Revenue Receipts?

By Durga Prashanna Mishra|Updated : August 23rd, 2022

The primary Difference Between Capital Receipts and Revenue Receipts is that Capital Receipts are the money brought to the business from non-operating sources, while Revenue Receipts are the result of a company’s routine activities during the financial year, which includes commission, sales, investment or interest. Capital Receipts differ from Revenue Receipts because the former has no bearing on the profit or loss for a financial year, but the latter can cause revenue expenses for the period.

Difference Between Capital Receipts and Revenue Receipts

Below, we have mentioned the difference between Capital Receipts and Revenue Receipts in brief.

Basis

Capital Receipts

Revenue Receipts

Meaning

It is the income generated from the investment and financing activities.

It is the income generated from the business’s operating activities.

Nature

Non-Recurring

Recurring

Shown

Shown on the liabilities side of the balance sheet.

Shown at the credit of either profit and loss account or trading account.

Examples

Loans taken, the sale of fixed assets, capital contribution, etc. 

Profits on sale of assets, interest received on loans, royalty, etc.

Received in exchange of

Source of income

Income

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FAQs

  • Capital receipts are the income generated from the financing and investment activities of a business, while on the other hand, revenue recipes are the income generated from the operating activities of a business. 

  • Examples of capital receipts include the sale of fixed assets, loans taken, capital contribution, etc. Some examples of Revenue receipts are the profit on the sale of assets, interest received on loans, sale of goods, royalty etc. 

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