CMA Foundation · Fundamentals of Financial and Cost Accounting · Financial Statements of Sole Proprietorship
Which of the following receipts of Anita Stores is a revenue receipt?
Commission of Rs 1,20,000 for services rendered in the ordinary course is the revenue receipt, because it arises from normal business operations. Capital introduced, loan raised and sale of a fixed asset are capital receipts.
- ARs 5,00,000 additional capital brought in by the proprietor
- BRs 3,00,000 from sale of old furniture at book value
- CRs 1,20,000 commission received for services rendered in the ordinary courseCorrect
- DRs 2,00,000 bank loan taken for expansion
Explanation
Commission earned from regular business activity is income arising from operations, so it is a revenue receipt. Capital introduced and loan are capital receipts, and sale of a fixed asset is also a capital receipt.
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