• Latest
  • All
  • News
  • Business

Revenue

Jun 6, 2017
How to Invest in Software and Security for Your Business

Unleashing Innovation: The Power of Custom Web Application Development

Sep 9, 2023
How to install and use a proxy for Instagram with OnlineProxy?

How to install and use a proxy for Instagram with OnlineProxy?

Sep 4, 2023
Unlocking the Power of Image Resizing in the Digital Era

Unlocking the Power of Image Resizing in the Digital Era

Sep 4, 2023
Top Benefits of Learning Salesforce for Beginners

Top Benefits of Learning Salesforce for Beginners

Sep 2, 2023

The Benefits of Implementing the SBG Bond Program in Your Organization

Sep 1, 2023
How Handheld Radios Improve Communication Efficiency in Industries

How Handheld Radios Improve Communication Efficiency in Industries

Sep 1, 2023
Impact and Importance of AI in Businesses

Revolutionizing Tech: Unveiling the Power of Specialized IT Solutions

Aug 29, 2023
Salesforce Training Best Practices: Strategies for Enhanced User Adoption

Salesforce Training Best Practices: Strategies for Enhanced User Adoption

Aug 29, 2023
Worldcoin (WLD) Price Today and Market Liquidity: Understanding Trading Volume

Worldcoin (WLD) Price Today and Market Liquidity: Understanding Trading Volume

Aug 29, 2023
Worldcoin (WLD) Price and Market Capitalization: Evaluating Token Value

Worldcoin (WLD) Price and Market Capitalization: Evaluating Token Value

Aug 10, 2023
How to Make Effective Business Videos for Your Marketing Campaign

Professional Finishing Techniques for Video Restoration

Aug 4, 2023
What Is AWS (Amazon Web Services)?

Why Cloud Computing Makes Working From Home A Stronger Proposition

Aug 4, 2023
  • Guest Posts
  • Advertise
  • Contact Us
  • Privacy Policy
Sunday, September 17, 2023
Tech Featured
  • Home
  • Latest Tech
  • Apple
  • How to’s
  • Apps
  • Automobiles
  • Gadgets
  • Gaming
  • Reviews
  • Tech Tips
No Result
View All Result
No Result
View All Result
Tech Featured
No Result
View All Result
Home News

Revenue

by techfeatured
Jun 6, 2017
in News
0
0
SHARES
6
VIEWS
Share on FacebookShare on Twitter

According to American Accounting Association, Committee on Accounting Concepts and Standards, “Revenue is the monetary expression of the aggregate of products or services, transferred by an enterprise to its customers during a period of time.”

Capital and revenue receipts

Capital receipts of business comprise of capital contributed by partner or by the shareholders; loans ; sale proceeds of any fixed asset, etc. In case of clubs and associations, receipts on account of life subscriptions; entry fee; government grants; legacies and endowments are capital receipts. Revenue receipts of a business are, cash from sales, discount received, commission, interest on investment etc. In case of club etc. annual subscriptions; sale of golf clubs and balls; receipts arising out of the premises being given to others for use on charges.

Revenue receipts are treated in the revenue account (trading and profit and loss account) while the capital receipts are treated in the balance sheet.

Whether a particular receipt is capital or revenue? The following guidelines may be stated:

– Nature of receipts is to be determined by its character in the hands of the person receiving it not by the source from which payment was made e.g., Payment of interest out of capital, by a company still under construction is capital expenditure for the company but revenue receipt in the hands of the person receiving it.

– In case of a single transaction of purchase and sale of property the motive of the owner will decide whether the receipt is capital or revenue e.g., A sells shares held by him as investment, it is a capital receipt but if A sells the shares with speculative motive it would be a revenue receipt.

– A receipt on account of fixed asset is a capital receipt while a receipt on account of current asset is a revenue receipt, e.g., sale proceeds of building, plant etc., constitute capital receipt while sale of stock-in-trade is revenue receipt.

– Where a receipt is in substitution of a source of income it is a capital receipt: but if it is’ in substitution of income alone, it is a revenue receipt e.g. if a railway passenger meets with an accident and dies or is permanently disabled, the compensation received from the railway company is capital receipt because this receipt is in substitution of source of income i.e. his life but if he is rendered only temporarily disabled the receipt will be revenue one, as it is in substitution of income alone i.e. loss of earnings during the period of disablement.

Where a sum is received for the surrender of certain right, it is capital receipt but where the sum received is in the nature of compensation for loss of future profits it is a revenue receipt e.g., A, the lease holder of fire-clay field and manufacturer of fire-clay goods, was prevented by the railway company for working on the field adjacent to the railway lines. Amount paid by the railway company to A is capital receipt, because it is the receipt in lieu of his right to work upon the clay field.

Tags: Revenue
ShareTweetShareSendShare

For any queries, you can reach us at [email protected]

Latest Posts

  • Unleashing Innovation: The Power of Custom Web Application Development
  • How to install and use a proxy for Instagram with OnlineProxy?
  • Unlocking the Power of Image Resizing in the Digital Era
  • Top Benefits of Learning Salesforce for Beginners
  • The Benefits of Implementing the SBG Bond Program in Your Organization
Tech Featured

© 2022. All Rights Reserved.

Navigate Site

  • Guest Posts
  • Advertise
  • Contact Us
  • Privacy Policy

Follow Us

No Result
View All Result
  • Home
  • Latest Tech
  • Apple
  • How to’s
  • Apps
  • Automobiles
  • Gadgets
  • Gaming
  • Reviews
  • Tech Tips

© 2022. All Rights Reserved.