Page 76 - VIRANSH COACHING CLASSES

of Fixed Asset. Capital Receipts are either added to Capital Fund or separately shown on
Liabilities side of Balance Sheet.
iii) Revenue Receipts :- All such receipts which are recurring in nature and represent regular
flow of income of a concern, are known as revenue receipts.
e.g Subscription Rent, Locker Rent, Interest received etc.
Receipts

Revenue Capital

Income & Expenditure A/c Balance sheet
All receipts are not income, capital receipts and considered in a different manner.

2.2.4 Types of Payments :
Payments

Capital Expenditure Revenue Expenditure and
(Long Period) (Short Period)
e.g. Purchase of Land, Salaries, Taxes, Insurance,
Furniture, Machinery etc. Premium etc.
i) Capital Expenditure :- These expenditures are non-recurring expenditure in nature. The
benefits of such Expenditure are likely to be received for a long period. These expense’s are
shown on the Assets side the Balance Sheet and their Balances are carried forward to next
accounting period.
ii) Revenue Expenditure :- There expenses are recurring in nature. The benefit of these expenses
are enjoyed immediately i.e. in current year.

iii) Deferred Revenue Expenditure :- Deferred revenue expenditure is actually a revenue
expenditure . Such expenditure is incurred for receiving benefits for more than a year.
e.g. Advertisement expenditure paid ` 30,000 is for 3 years. In such case 1/3rd of ` 30,000 is
` 10,000 is for current year. It should be debited to Income and Expenditure Account and 2/3rd
` 20,000 expenditure should be shown on Asset side of Balance Sheet.
Total Receipts

Revenue Credit side of Income & Expenditure Account
Capital Liability side of Balance Sheet.

Total Payments
Revenue Debit side of Income & Expenditure Account

Capital Balance Sheet Asset side.

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