Difference between Capital receipts and Revenue receipt

Capital Receipt

Capital receipts are the income received by the company which is non-recurring in nature. They are part of the financing and investing activities rather than operating activities. The capital receipts either reduces an asset or increases a liability. The receipts can be generated from the following sources:

• Issue of Shares
• The issue of debt instruments such as debentures.
• Loan taken from a bank or financial institution.
• Government grants.
• Insurance Claim.
• Additional capital introduced by the proprietor.

Revenue Receipt

Revenue Receipts are the receipts which arise through the core business activities. These receipts are a part of normal business operations that is why they occur again and again however its benefit can be enjoyed only in the current accounting year as its effect is short term. The income received from the day to day activities of business includes all the operations that bring cash into the business like:

• Revenue generated from the sale of inventory
• Services Rendered
• Discount Received from the creditors or suppliers
• Sale of waste material/scrap.
• Interest Received
• Receipt in the form of dividend
• Rent Received