Capital and revenue
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Capital and revenue

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Capital and revenue Capital and revenue Presentation Transcript

  • Capital and Revenue
    • Profit = Receipts – Expenses
    • Periodicity concept
    • Matching concept
    • Accrual concept
    • while determining profit / loss made during a particular period, all incomes relating to that period (whether received or not) are to be compared with the expenditure relevant to such income (whether actually paid or not)
  • Income
    • Capital income (gain)
    • Income which does not grow out of or pertain to the running of the business proper
    • 2. Revenue Income (profit)
    • Income which arises out of and in the course of regular business
  • Expenditure
    • Capital expenditure
    • Incurred for the purpose of obtaining a long term advantage for the business
    • 2. Revenue expenditure
    • Expenses which arises out of and in the course of regular business
    • 3. Deferred Revenue expenditure:
    • Revenue exp incurred during an accounting period but is applicable wholly or in part to future periods
  • Capital Vs Revenue
    • Repairs
    • Wages
    • Legal charges
    • Transport charges
    • Interest on capital
    • Raw materials and stores
    • Development expenditure
    • Advertising
    • Preliminary expensus
  • Receipts
    • Capital Receipt
    • Additional payments made to the business by the owner or receipts from the sale of business assets
    • 2. Revenue Receipt
    • Any receipt which is not a capital receipt