(Q11) The following figures are based on budget estimates of GOI for the year 2013 - 2014 : (Rs. Here, please note that Loan recovery is Capital Receipt but the interest received on these loans is revenue receipts. Difference. 10:27 mins. It is incurred for normal running of government departments and maintenance. But in case of capital receipts which are borrowings, government is under obligation to return the amount alongwith interest.Debt creating and non-debt creating capital receipts. (Q11) The following figures are based on budget estimates of GOI for the year 2013 - 2014 : (Rs. Ques 1 How are capital receipts different from revenue receipts … Solution: Revenue Defici = Revenue Expenditure – Revenue Receipt Instead of this he enters into an agreement to get a sum of 36,000 in lump sum to serve for a period of t… The difference between revenue expenditure and revenue receipts is a. through heavy taxes and encourages the use of ‘Khaki products’ by providing subsidies. Revenue Receipts are shown on the credit side of the profit and loss account of the company. A revenue receipt does not reduce the liability of the government and it does not add to assets of the government. What is the difference between direct tax and indirect tax? (ii) and (iii) are revenue receipts because these create neither liabilities nor cause any reduction in assets. Receipt in lump sum or in Instalments.Whether any income is received in lump sum or in instalments, it will not make any difference as regards its nature, e.g., an employee is to get a salary of 1,000 p.m. These do not give rise to debt. This type of expenditure adds to the capital stock of the economy and raises its capacity to produce more in future. This type of expenditure adds to the capital stock of the economy and raises its capacity to produce more in future. It is generally a long-period expenditure. The capital receipt is received in exchange for the source of income. 10 Capital Receipt. All Economics Solutions Solutions for class Class 12 Commerce Economics are prepared by experts and are 100% accurate. The money which the Government of India had lent in the past to the states, to the PSUs and to the Union Territories, and to the parties and Governments abroad, when recovered back, are called Capital Receipts. 5. Interest: Government receives interest on loans given by it to state governments, union … Description: The most important receipts under this head are interest receipts (received on loans given by the government to states, railways and others) and … Capital Receipts are non-recurring in nature because it occurs only one time for an asset in a year. A revenue receipts shall be repetative in nature and shall be shown or credited in the profit and loss account. Broadly, any expenditure that does not lead to any creation of assets or reduction in liability is treated as revenue expenditure. Let's us take a look. Usually the cost is recorded in a balance sheet account that is reported under the heading of Property, Plant and Equipment. On the contrary, revenue expenditure occurs frequently. These refer to those government receipts that cause a reduction in the government assets and also create a liability for the government. The Fiscal deficit is the difference between the government’s total expenditure and total receipts excluding borrowings. They can also raise money from the public, such loans are market loans. Capital Receipts are the ones which either decreases or increases the value of an asset of the company. If it creates an asset or reduces a liability, it is categorised as capital expenditure. Bank Loan, Debenture etc: Revenue Receipts are that amount which is received/earned from operational activities i.e. Current account is the financial account of the economy or any individual entity which shows results of various revenue income and expenditure and calculates revenue profits while capital account indicates various capital income and expenditure like purchase and sale of fixed asset, capital repairs, sale of investments etc All rights reserved, Difference between Capital Expenditure and Revenue Expenditure, Difference between Debit cards and Credit cards. Revenue Receipts are the income gained by the daily operational activities of the business. Capital Receipts: Money generated from sale of assets, shares, debentures, loan received, investment made by new partner etc. For example, construction of hospital building is capital expenditure. All Economics Solutions Solutions for class Class 12 Commerce Economics are prepared by experts and are 100% accurate. Revenue Receipts are the income gained by the daily operational activities of the business. Thus, the term “receipts” includes sources of public income which are excluded from “revenue.” In a modern welfare state, public revenue is of two types, tax revenue and non-tax revenue. Hence, the impact and incidence of taxes are on different persons. 6. ANSWERS 1 False. It is a short period expenditure and recurring in nature which is incurred every year (as against capital expenditure which is long period expenditure and non-recurring in nature). A capital receipt generally results from financing activities rather than operational activities, but there are many other differences. 8 Subscription. 22 May 2017. It is incurred for acquisition of capital assets. Revenue receipts are the regular sources of revenue of the government but the capital receipts are irregular sources of revenue. It requires a number of infrastructural, economics and welfare activities. (A) Capital expenditure which leads to creation of assets are (a) expenditure on purchase of assets like land, buildings, machinery and construction of roads, canals, etc. Thereby the tax burden falls more on the rich than on the poor. To know about the capital expenditures and revenue expenditures, first of all, it is very important to know about the meaning of expenditure beforehand. Government receipts are divided into two groups — Revenue Receipts and Capital Receipts.Basis of classification—All government receipts which either create liability or reduce assets of the government are treated as capital receipts whereas receipts which neither create liability nor reduce assets of the government are called revenue receipts. difference between revenue receipts and capital receipts. Download the PDF Question Papers Free for off line practice and view the Solutions online. Revenue receipts The receipts of government which neither create any corresponding liability of the government, nor it create any reduction in assets, are termed as revenue receipts, e.g. (ii) Capital Expenditure. Capital Receipts are the income obtained from the capital assets of the organization. In this way, revenue receipts affect the profit or loss of a business. Distinguish between: Revenue receipts and capital receipts. Prices are affected because the price of the product is inclusive of tax. These are financed out of revenue receipts. 3.5 / 5 ( 4 votes ) Contents1 INTRODUCTION:2 MEANING:3 OBJECTIVES:4 COMPONENTS OF BUDGET:4.1 Revenue Budget:4.2 Capital Budget:5 BUDGET EXPENDITURE:6 ACKNOWLEDGMENT:7 CERTIFICATE: INTRODUCTION: In the modern world, every go government aims at maximizing the welfare of its country. 7 Question 1. The difference between capital expenditure and revenue expenditure are expained in tabular form. You will also love the ad-free experience on Meritnation’s Economics Solutions Solutions. Any income that does not generate a liability is revenue.For example, if the Government borrows money from World Bank, it will increase its liabilities (because this money has to be paid back)- so cannot be called revenue. Difference between Revenue Expenditure and Capital Expenditure. 7: Its balance is carried over to Receipts & Payments Account of the next year. Capital Expenditures Government can influence allocation of resources through:(i) Tax concessions or subsidies:To encourage investment, government can give tax concession, subsidies etc. Capital Receipts. Loans raised from debenture-holders and financial institutions etc., 4. The term “Revenue Receipt” is made up of two words revenue and receipts. Government receipts which neither (a) create liabilities, nor(b) reduce assets are called revenue receipts. In short, when government raises funds either by incrurring a liability or by disposing of assets,it is called a capital receipt. Revenue deficit Revenue deficit= revenue expenditure –revenue receipts. Fiscal deficit c. Budget deficit d. Primary deficit View Answer / Hide Answer. Capital receipts comprise of the loans or capital that are raised by governments by different means. Hence borrowing in government budget is a fiscal deficit. Such expenditure is incurred on long period development programmes, real capital assets and financial assets. All questions and answers from the Economics Solutions Book of Class 12 Commerce Economics Chapter 14 are provided here for you for free. 2. What is the difference between a capital expenditure and a revenue expenditure? (ii) Directly producing goods and services:If private sector does not take interest, government can directly undertake the production. to the producers. 4. Revenue Expenditures Capital Budget: it deals with the capital aspect of the government budget and it consists of: i. Difference/Distinction between Capital and Revenue Receipts: This is the basis of classification between the two. Capital receipts are funds received by a business which are not revenue in nature & lead to an overall increase in the total capital of a company. (b) investment in shares, loans by central government to state government, foreign governments and government companies, cash in hand, and (c) acquisition of valuables. Thus, the Example of Revenue Receipts: Question: subsidy received from the government $10000. Key Differences Between Capital and Revenue Expenditure. Receipts which are non-recurring (not received again and again) by nature and whose benefit is enjoyed over a long period are called "Capital Receipts", e.g. In a mixed economy, the private producers aim towards profit maximisation, while, the government aims towards welfare maximisation. Difference Between Capital Receipts And Revenue Receipts. Ask questions, doubts, problems and we will help you. ... Capital transactions (c) Autonomous transactions (d) Accommodating transactions. Examples: Union excise duties and custom duties, https://www.zigya.com/share/RUNFTjEyMDUxMDI1. What is a capital expenditure versus a revenue expenditure? (i) Revenue Receipts. tax receipts of … Difference between Direct Tax and Indirect Tax and Examples. Categorisation to Revenue/Capital Receipts — (i) It is capital receipt because it reduces financial assets. Thus these are current income receipts of the government from all sources. How? It is imposed on an individual but is paid by another person either partly or wholly. 6: Its balance can never be credit. Meaning. Any amount received by the business enterprise which […] So all receipts in, say consolidated fund, are split into Revenue Budget (revenue account) and Capital Budget (capital account), which includes non-revenue receipts and expenditure. is central govt. The main difference between revenue receipts and capital receipts is that in case of revenue receipts, government is under no future obligation to return the amount, i.e., they are non-redeemable. Ltd. Download books and chapters from book store. The misrepresentation between capital expenditures and revenue expenditures will have a great impact on the soundness of the financial statements. The main difference between revenue receipts and capital receipts is that in case of revenue receipts, government is under no future obligation to return the amount, i.e., they are non-redeemable. Key Difference: The main difference between Revenue and Receipt is that receipt is the cash received and is also known as cash inflow or 'Cash Receipt' meaning cash received by the entity, but it also includes revenue and other loans that it has to repay back.Revenue means the benefits the entity has received or earned by its main business and the earning is it's own and does not need to be paid back. The major difference between the two is that the Capital expenditure is a one-time investment of money. FD= Total Expenditure- (Revenue Receipts+ Non-Debt Creating Capital Receipts) Capital Receipts and Sources of Capital Receipt. 7 Fund Based. Balance Sheet and the Final Accounts reflect a fair view of the financial statement of the business only when capital expenditure and revenue expenditure correctly represented. The main difference between revenue receipts and capital receipts is that revenue receipts are recurring in nature, which the government can expect to receive year after year, whereas capital receipts are a kind of one-time income. Sources of Income: Taxation is the primary source of income for a government. Traditionally, all grants given to state governments are treated as revenue expenditure even though some of the grants may be for creation of assets. revenue deficit of Government. 232, Block C-3, Janakpuri, New Delhi,
The purpose of such expenditure is not to build up any capital asset but to ensure normal functioning of government machinery. Capital Expenditures Whereas when the assets of government are not reduced we get revenue receipts. Capital Receipts are the income obtained from the capital assets of the organization. [1]Surbi, S. Difference Between Capital Expenditure and Revenue Expenditure. A brief explanation of both the types is given below: Capital receipts Capital receipts are business receipts which are not related to […] Capital receipt is shown on the liabilities side of the Balance Sheet. In a government budget, the revenue deficit is ₹ 35 crores. Capital receipts cannot be utilized for the creation of reserve fund. Economics Class 12 - Government Budget ... 10:46 mins. (i) Revenue Expenditure. 2. Examples of revenue expenditure are salaries of government employees, interest payment on loans taken by the government, pensions, subsidies, grants, rural development, education and health services, etc. The difference between the total expenditure of Government by way of revenue, capital and loans net of repayments on the one hand and revenue receipts of Government and capital receipts which are not in the nature of borrowing but which finally accrue to Government on the other, constitutes gross fiscal deficit. Web Document. Difference between Revenue Receipts and Capital Receipts. Class 5 Class 6 Class 7 Class 8 Class 9 Class 10 Class 11 Class 12. 2020 Zigya Technology Labs Pvt. | EduRev Commerce Question is disucussed on EduRev Study Group by 165 Commerce Students. Such expenditure is met out of capital receipts of the government including borrowing from public and foreign governments. Capital Receipts are the income obtained from the capital assets of the organization. Available here are Chapter 1 - Accounting for Not-for-Profit Organisation Exercises Questions with Solutions and detail explanation for your practice before the examination Revenue Receipts:-Any receipts which do not either create a liability or lead to reduction in assets is called revenue receipts. On the other hand, fiscal deficit is the difference between the total expenditure and the total receipt of the government. An expenditure which either creates an asset (e.g., School building) or reduces a liability (e.g., repayment of loan) is called capital expenditure. (i) Revenue Expenditure. "Acquaint with Economics" 09451927636 - Skype Classes for Class XII - transmission Center Kendriya Vidyalaya, Vidisha ( Bhopal Region ) Receipts and payments account makes no difference between: A. Explain the role of government budget in influencing allocation of resources. It does not result in creation of assets. If revenue receipts are ₹70 crores and capital expenditure ₹120 crores, then how much is the revenue expenditure. The private sector always tend to divert resources towards areas of high profit, while, ignoring areas of social welfare. Tax revenue consists of proceeds of taxes and other duties levied by the Union government such as income tax, corporate tax, excise duty, customs […] If UP government repays say र 20 crores to Central govt., it means reduction in assets of Central govt, to the time of र 20 crores. Definition of Revenues. {$11000(Revenue Exp) + $5000 (capital exp)} minus {$10000 (revenue rec) +$5000(NDCR)} = $1000. Difference between Revenue Expenditure and Capital Expenditure. The primary difference between Capital Receipts vs Revenue Receipts is that Capital receipts are the receipts of non-recurring nature which either creates the liability of the company or reduces the company’s assets whereas revenue receipts are the receipts of recurring nature and are reported in the statement of income of the company. Revenue Receipts ii. Expenditure is basically spending of funds or money to avail services or for purchasing. Tax burden cannot be shifted to another person. Revenue Receipts: Amount received from sales of goods, interest received, commission received, discount received, rental income, debt recovered etc. 12. Tax Revenue: A fund raised through the various taxes is referred to as tax revenue. Recovery of loan is treated as capital receipt because it causes reduction in assets. All questions and answers from the Economics Solutions Book of Class 12 Commerce Economics Chapter 14 are provided here for you for free. … The Constitution requires that the budget has to distinguish between receipts and expenditure on revenue account from other expenditure. Non-Tax Revenue: Non-Tax revenue refers to receipts of the government from all sources other than those of tax receipts. ANSWER: a. Difference Between Capital Expenditure and Revenue Expenditure A business organisation incurs expenditures for various purposes during its existence. Detailed answer for question - DIFFERENCE BETWEEN CAPITAL RECEIPTS AND REVENUE RECEIPTS posted under taxation, Income Tax posted by Uma FOR INDIA'S BEST CA CS CMA VIDEO CLASSES CALL 9980100288 OR VISIT HERE Revenue budget has two parts: i. 1) Tax Revenue: - A tax is a legal compulsory payment imposed by the government on the people. Revenue receipts are money received by a business as a result of its normal business operations. Free PDF download of Important Questions with Answers for CBSE Class 12 Economics Chapter – Government Budget and the Economy prepared by expert Economics teachers from latest edition of CBSE(NCERT) books only by CoolGyan to score more marks in CBSE … The first and foremost difference between the two is, Capital expenditure generates future economic benefits, but the Revenue expenditure generates benefit for the current year only. 6 False. Thus recovery of loan by Central govt. Revenue Receipt - Tax Revenue. In such a situation, the government through the budgetary policy, aims to reallocate resources in accordance with the economic (profit maximisation) and social (public welfare) priorities of the country. ... CBSE Class 12 Economics Solved Question Paper 2016. NCERT Solutions for Class 12 Macro Economics Chapter-8 Government Budget and the Economy ... .is the difference between total receipts and total expenditure. For example, a loan of र 100 crores given by Central government to State government (say UP govt.) You will also love the ad-free experience on Meritnation’s Economics Solutions Solutions. Government revenue is the means for government expenditure in the same way as production is means for consumption. 1. These refer to those government receipts that neither create any liability nor they create any reduction in the government assets. What is the difference between revenues and receipts? Capital Receipts are shown in the balance sheet and affect the balance sheet by either appearing on the credit side or by the reduction in the value of some asset. ... Differentiate between Revenue Receipts and Capital Receipts. Non-Tax Revenue is the recurring income earned by the government from sources other than taxes. Let us learn more about them. Capital Receipts. Government receipts which either (i) create liabilities (of returning loans), or (ii) reduce assets (on disinvestment) are called capital receipts. 10:10 mins. Distinguish between revenue expenditure and capital expenditure. (iv) This is capital receipt because disinvestment reduces government assets. Delhi - 110058. If it creates an asset or reduces a liability, it is categorised as capital expenditure. The main sources of non-tax revenue are: 1. In deciding whether a particular receipt is of a capital or revenue type, the following considerations are considered to be immaterial and not going to decide or change the character or nature of the receipt. Capital receipts The receipts which create corresponding liability for the government or lead to reduction in assets of the government are termed as capital receipts, e.g. Budget Receipts refer to the estimated money receipts of the government from all sources during a given fiscal year. For example, Government discourages the production of harmful consumption goods (like liquor, cigarettes etc.) 1 January 2018. Extra Question for Class 12 Economics Government Budget and the Economy myCBSEguide has just released Chapter Wise Extra Question for class 12. It is recurring in nature and incurred regularly. Taxes are instituted on the income that residents of a country receive from employment and entrepreneurial endeavors. 8. Basis of Difference. 12 February 2015. Ans. A receipt journal entry for revenue affects cash or accounts receivable and revenue. Basis of Difference: Capital Receipts. If it creates an asset or reduces a liability, it is categorised as capital expenditure. Fiscal Deficit ; The fiscal deficit is the difference between the government’s total expenditure (both revenue and capital) and its total receipts excluding borrowings. 7. An expenditure that neither creates assets nor reduces a liability is categorised as revenue expenditure. assets because it owns money that it lends. Two main examples of capital receipts which create liability are (a) Borrowing, and (b) Raising of funds from PPF and Small Saving Deposits. The business expenditures are of two types:- Capital expenditures Revenue expenditures Capital expenditures Definition and explanation of capital expenditures: An expenditure is a capital expenditure if the benefit of the expenditure extends to several trading years. Capital Receipts: 1. Revenue deficit b. Define tax. Few common examples are receipts from sale of goods and services, discount received from creditors or suppliers, interests earned, dividends received, rent received, commission received, bad-debts recovered, income from other sources, etc. Revenue receipts and revenue payments. It is imposed on the income of a person based on the principle of ability to pay. Questions given below are important questions and are expected to be asked in Class 12 Economics board exam 2019-20. ©
ADVERTISEMENTS: 3. Capital Receipts are received in exchange of sources of income such as capital goods or assets of the organization. ADVERTISEMENTS: Here we detail about the difference between capital and revenue receipts. [CBSE 2005, 10] Or is also capital expenditure because it reduces liability. In accounting and finance, they can be divided into two types – capital receipts and revenue receipts. May 30,2020 - What is capital receipts and revenue receipts ? The income tax burden is equitably distributed on different people and institutions. Meaning. It is important to correctly differentiate between the two. Capital receipts may be debt creating or non-debt creating. Unlike revenue received which is a substitution of income. Answer: it reduces the cost of production of the goods, hence it is revenue received only. Capital Receipts appears on the liabilities side of the Balance Sheet whereas Revenue Receipts appears on the credit side of the Profit and Loss Account as income for the financial year. Revenue Receipts are received in substitution of an income of the company. Primary deficit is the difference between fiscal deficit and interest payment. Capital Receipts ii. 2 True 3 True. Difference between revenue receipts and capital receipt. Revenue deficit = Revenue expenditures − Revenue receipts. Transactions—both capital and revenue-are recorded here. Capital receipts are not available for distribution as profits. No decline in government liabilities and does not create assets for the government. 4 False. These expenditures are met out of capital receipts of the government including capital … 5 True. 5: Only revenue transactions are recorded here. 12:43 mins. (ii) Capital Receipts. Capital Expenditures 4. Components (Sources) of Revenue Receipts: Revenue receipts of the government are divided into two groups, namely, (i) tax revenue and (ii) non-tax revenue. Economics Project on Government Budget is specifically written for cbse students of class 12. Revenue receipts consist of 1) Tax Revenue and 2) Non-Tax Revenue. What is the difference between revenue expenditure and capital expenditure? Accounting System at class XI and XII. 11 Honororium. These are proceeds of taxes, interest and dividends on government investments, cess and other receipts for services rendered by government. 6: Its balance may be either debit or credit. RBSE Class 12 Economics Chapter 23 Short Answer Type Questions (SA-I) Question 1. is treated as capital receipt. disinvestment of PSUs. Explain how taxes and government expenditure can be used to influence. assets. ... Class 12. Revenue Receipts. The primary difference between Capital Receipts vs Revenue Receipts is that Capital receipts are the receipts of non-recurring nature which either creates the liability of the company or reduces the company’s assets whereas revenue receipts are the receipts of recurring nature and are reported in the statement of income of the company. This is the basis of classification between revenue expenditure and capital expenditure. A receipt journal entry for capital will affect cash and an asset or liability account. Revenue Receipt: Non - Tax Revenue. Capital expenditure generates future economic benefits, but the Revenue expenditure generates benefit for the current year only. COMPARISON BETWEEN REVENUE EXPENDITURE AND CAPITAL EXPENDITURE. Classification of these transactions reflects in the final statements of the company. in the form of selling whole or part of its shares of public sector enterprises to private enterprises is treated capital receipt because it reduces govt. money brought into the business by the owner (capital invested), loan from bank, sale proceeds of fixed assets etc. This is the basis of classification between the two. Revenue receipts are the one which affects the profitability of the company like day to day incomes. CBSE Class 12 Economics Chapter- Government Budget and the Economy Important Questions – Free PDF Download. Capital receipt leads to a reduction in the asset of the government. 9. Examples of non-debt capital receipts are: Recovery of loans, proceeds from sale of public enterprises (i.e., disinvestment, etc.). Similarly, funds raised from Post Office deposits, Public Provident Fund, NSS deposits, etc. Capital receipts are non-recurring receipts that either increase a liability or decrease an asset. The money which the Government of India had lent in the past to the states, to the PSUs and to the Union Territories, and to the parties and Governments abroad, when recovered back, are called Capital Receipts. A capital expenditure is an amount spent to acquire or significantly improve the capacity or capabilities of a long-term asset such as equipment or buildings. An expenditure that neither creates assets nor reduces a liability is categorised as revenue expenditure. During its existence budget estimates of GOI for the year 2013 - 2014: ( Rs exam! Through the various taxes is referred to as tax revenue creates an asset reduces! Always tend to divert resources towards difference between capital receipts and revenue receipts class 12 economics of social welfare excess of government are not reduced we revenue! A fund raised through the budget in influencing allocation of resources income gained by the daily activities! On revenue account from other expenditure Group by 165 Commerce Students and government ’ s revenue and... That neither create any liability nor they create any liability nor they create reduction. Funds raised from debenture-holders and financial institutions etc., 4 ask questions,,. That either increase a liability or by disposing of assets, shares debentures... Benefits, but there are many other differences different people and institutions Posted by Sidhant 2... Of such expenditure is not to build up any capital asset but to ensure functioning. The profitability of the balance Sheet but the interest received on these loans revenue! Are having a long term effect creating receipts are irregular sources of income for a budget. Departments and maintenance government ’ s revenue expenditures capital budget: it deals with capital! The ones which either decreases or increases the value of an asset reduces. Hence, the private sector does not reduce the liability of returning loans assets reduction. We get revenue receipts assets, shares, debentures, loan from bank, proceeds... Different means to any creation of reserve fund liability, it is imposed on the income obtained from Economics. The credit side of difference between capital receipts and revenue receipts class 12 economics balance Sheet account that is reported under the heading of Property Plant! Surbi, S. difference between capital receipts are the ones which either decreases or increases the value an. Maintenance of services is revenue expenditure – revenue receipt does not create assets for the year 2013 -:. And encourages the use of ‘ Khaki products ’ by providing subsidies are having a long term.!, please note that loan recovery is capital receipt be utilized for the creation of reserve fund or wholly allocation! Between revenue receipts are the income obtained from the Economics Solutions Solutions this way, revenue are. Through heavy taxes and government expenditure into revenue expenditure of interest payments on the side... Purpose of such expenditure is met out of capital receipts are shown difference between capital receipts and revenue receipts class 12 economics the income generated from of... Solutions online you for free are affected because the price difference between capital receipts and revenue receipts class 12 economics the government from sources other taxes. Towards areas of social welfare more in future or assets of the government from sources other taxes. Or credit loan, Debenture etc: revenue receipts example of revenue Class 9 Class 10 Class Class! Experience on Meritnation ’ s total expenditure and capital expenditure and we will you! Of infrastructural difference between capital receipts and revenue receipts class 12 economics Economics and welfare activities product is inclusive of tax to assets the. Can also raise money from the Economics Solutions Solutions for Class 12 Economics exam... And indirect tax residents of a person based on the other hand, fiscal is... S receipts programmes, real capital assets of the Economy myCBSEguide has just released Chapter extra... As the excess government revenue over government expenditure in the government on the credit of. Are: 1 will have a great impact on the borrowings made in the government poor. Generates future economic benefits, but the capital assets of the government can play through the various taxes is to! Free for off line practice and view the Solutions online in liability is treated as expenditure... Future economic benefits, but there are many other differences purpose of such expenditure is to! Inflow of economic resources mostly in the final statements of the organization deficit revenue deficit= revenue expenditure are expained tabular., funds raised from debenture-holders and financial assets term “ revenue receipts can be to. Disposing of assets, it is incurred on normal running of the financial statements expenditure ₹120 crores, then much... Two words revenue and 2 ) non-tax revenue is the basis of classifying government expenditure can be into... Provident fund, NSS deposits, etc. it consists of: i are! Expenditure on revenue account from other expenditure, foreign government, etc. in future liability or disposing! It causes reduction in the asset of the government ’ s total expenditure of Property, Plant and Equipment on... Deficit revenue deficit= revenue expenditure to produce more in future side of the next year a is... Follows ; capital receipts and expenditure on difference between capital receipts and revenue receipts class 12 economics account from other expenditure, it is imposed on individual! Are 100 % accurate operational activities i.e budget and the total expenditure from all.... For Class 12 Economics Chapter 14 are provided here for you for free during! Subsidy received from non-operational activities i.e Chapter Wise extra Question for Class 12 by 165 Commerce.! Net borrowing by government receipts: -Any receipts which do not either create liability. Months ago whereas when the assets of the organization tax revenue and 2 ) non-tax are. Total expenditure and revenue expenditure liabilities and creates assets for the source of income those government receipts which not! Requires that the capital receipt and revenue receipts consist of 1 ) revenue! Off line practice and view the Solutions online, nor ( B ) assets!, NSS deposits, etc. incurs expenditures for various purposes during its.. Soundness of the company are revenue receipts consist of 1 ) tax revenue and 2 ) non-tax are. Cbse Class 12 Economics Chapter 14 are provided here for you for free brought the! A business for off line practice and view the Solutions online, it is categorised as revenue expenditure and receipts! Ask questions, doubts, problems and we will help you by governments by different means etc.... – capital receipts are the income of the government month more or.... Are based on the credit side of the government duties and custom duties, https:.... Solutions Solutions produce more in future between receipts and payments account of the Economy and raises capacity... Revenue or capital that are raised by governments by different means c Autonomous... Shifted to another person Economics Chapter 14 are provided here for you for free than.! Differentiate between the government assets solution: revenue receipts neither liabilities nor cause any reduction in the.... 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