Classify the following expenditures as capital or revenue expenditure/receipt: (ii) Amount received from debtors during the year.

CA Foundation · Accounting · RTP · September 2026
Classify the following expenditures as capital or revenue expenditure/receipt: (ii) Amount received from debtors during the year.

Suggested Answer and Working Notes:

Amount received from debtors is simply the amount which is already earned as revenue in a prior period. It does not generate any new income, nor does it create or extinguish a long-term asset or liability. It is therefore a revenue receipt .

Topics: Capital and Revenue Expenditures and Receipts

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