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Amount received from IDBI as a medium term loan for augmenting working capital is
- a)Capital expenditures
- b)Revenue expenditures
- c)Capital receipt
- d)Revenue receipt
Correct answer is option 'C'. Can you explain this answer?
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Amount received from IDBI as a medium term loan for augmenting working...
Medium Term Loan from IDBI as a Capital Receipt
Explanation:
When a company receives a medium-term loan from a financial institution such as IDBI, it is considered a capital receipt.
Capital receipts are those receipts that are related to the company's capital or long-term funds. They represent the inflow of funds that are raised by the company to meet its capital expenditures or to augment its long-term working capital.
In this case, the medium-term loan from IDBI is for augmenting working capital, which is a long-term requirement for the company. This loan is not related to the company's day-to-day operations or revenue generation. It is a long-term source of finance that the company can use to invest in capital expenditures or to meet its long-term working capital requirements.
Therefore, the correct answer is option 'C', which states that the amount received from IDBI as a medium-term loan for augmenting working capital is a capital receipt.
Conclusion:
In conclusion, it is important to understand the difference between capital receipts and revenue receipts. Capital receipts are those receipts that are related to the company's capital or long-term funds, while revenue receipts are those receipts that are related to the company's day-to-day operations or revenue generation. The amount received from IDBI as a medium-term loan for augmenting working capital is a capital receipt as it is related to the company's long-term working capital requirements.
Explanation:
When a company receives a medium-term loan from a financial institution such as IDBI, it is considered a capital receipt.
Capital receipts are those receipts that are related to the company's capital or long-term funds. They represent the inflow of funds that are raised by the company to meet its capital expenditures or to augment its long-term working capital.
In this case, the medium-term loan from IDBI is for augmenting working capital, which is a long-term requirement for the company. This loan is not related to the company's day-to-day operations or revenue generation. It is a long-term source of finance that the company can use to invest in capital expenditures or to meet its long-term working capital requirements.
Therefore, the correct answer is option 'C', which states that the amount received from IDBI as a medium-term loan for augmenting working capital is a capital receipt.
Conclusion:
In conclusion, it is important to understand the difference between capital receipts and revenue receipts. Capital receipts are those receipts that are related to the company's capital or long-term funds, while revenue receipts are those receipts that are related to the company's day-to-day operations or revenue generation. The amount received from IDBI as a medium-term loan for augmenting working capital is a capital receipt as it is related to the company's long-term working capital requirements.
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Amount received from IDBI as a medium term loan for augmenting working capital isa)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer?
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Amount received from IDBI as a medium term loan for augmenting working capital isa)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Amount received from IDBI as a medium term loan for augmenting working capital isa)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Amount received from IDBI as a medium term loan for augmenting working capital isa)Capital expendituresb)Revenue expendituresc)Capital receiptd)Revenue receiptCorrect answer is option 'C'. Can you explain this answer?.
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