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2B&3A REVENUE RECEIPTS VS CAPITAL RECEIPT (REVENUE RECEIPTS (The…
2B&3A
REVENUE RECEIPTS VS CAPITAL RECEIPT
REVENUE RECEIPTS
The result of Labor or capital or both labor and [capital]. For example: usually income is the result of investing of capital or labor.
CAPITAL RECEIPT
Capital gains are "profits realized from increase in the marlet value of any assets that are NOT part of owner's stock in Trade or that he does not regular offer for sale
FIXED CAPTIAL
1)when it is retained in the business with the objective of producing profits 2)Receipts are not bought into P/L
CIRCULATING
1)if it is acquired in the ordinary course of trade and is sold, or is used in the manufacturing of what is sold 2)Receipts are brought into P/L
CAPITAL INCOME VS INCOME RECEIPTS
For example: Tress Vs Fruit
Tree-----Capital
Fruit------Revenue
RECEIVED BY INDIVIDUALS
REVENUE nature: Personal services e.g Salaries, bonuses and gratitude
Received for services rendered
Received for rights to use assets or property
Received from normal business transactions
Received form insurance for the loss of trading stocks destroyed by fire
Damages received by Jetty owner as Jetty were destroyed during repairment(loss of income)
CAPITAL nature: Employees receives compensation for wrongful termination of a service agreement or is paid for loss of office or employment.
Strike lottery
Inheritance
Realization of private Investment
For destruction of profit making structure(business)