New Master Descriptive Writing with our RBI One-Month Batch!
Register

Question

Which of the following is NOT an example of capital receipt?

A Amount received from the sale of an old machine. Correct Answer Incorrect Answer
B Amount received from the sale of finished goods. Correct Answer Incorrect Answer
C Amount received from the sale of investments. Correct Answer Incorrect Answer
D Amount received from the sale of furniture. Correct Answer Incorrect Answer

Solution

Capital receipts refer to the funds or receipts that result in a liability, reduction in assets, or an increase in capital. They are typically non-recurring in nature and have long-term implications for the organization's financial structure. Options a, c, and d can be considered examples of capital receipts. Option b, the amount received from the sale of finished goods, is not considered a capital receipt. The sale of finished goods falls under the category of revenue receipts, as it is a regular business transaction and is part of the normal operating activities of the business.

Practice Next
×
×