CA Foundation Exam > CA Foundation Questions > Loss caused by theft of cash by cashier after...
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Loss caused by theft of cash by cashier after business hours is a :
- a)Revenue loss
- b)Deferred revenue loss
- c)Capital loss
- d)None of the above
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Loss caused by theft of cash by cashier after business hours is a :a)R...
Loss of cash due to theft committed either by the employees or by the outsiders, after business hours, is a capital loss because the loss is outside the trade and not incidental to the business. If the loss had been caused during the business hours it would have been a revenue loss because it is incidental to the business.
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Loss caused by theft of cash by cashier after business hours is a :a)R...
**Explanation:**
The loss caused by theft of cash by a cashier after business hours is considered a **capital loss**. Here's why:
**1. Revenue Loss:**
- Revenue loss refers to a decrease in income or sales of a business.
- In this case, the theft of cash does not directly impact the revenue generated by the business. It is a loss of cash assets rather than a loss of income or sales.
- Hence, it cannot be classified as a revenue loss.
**2. Deferred Revenue Loss:**
- Deferred revenue loss refers to the postponement of revenue recognition due to certain circumstances.
- In this scenario, the theft of cash does not involve any deferral of revenue recognition.
- Therefore, it does not fall under deferred revenue loss.
**3. Capital Loss:**
- A capital loss occurs when there is a decrease in the value of a capital asset, such as cash, inventory, or property.
- In this case, the theft of cash results in a direct decrease in the value of the cash asset held by the business.
- Since cash is considered a capital asset, the loss caused by its theft is classified as a capital loss.
**4. None of the Above:**
- This option is not applicable as the loss can be categorized as a capital loss.
In conclusion, the theft of cash by a cashier after business hours is considered a capital loss as it directly reduces the value of the cash asset held by the business.
The loss caused by theft of cash by a cashier after business hours is considered a **capital loss**. Here's why:
**1. Revenue Loss:**
- Revenue loss refers to a decrease in income or sales of a business.
- In this case, the theft of cash does not directly impact the revenue generated by the business. It is a loss of cash assets rather than a loss of income or sales.
- Hence, it cannot be classified as a revenue loss.
**2. Deferred Revenue Loss:**
- Deferred revenue loss refers to the postponement of revenue recognition due to certain circumstances.
- In this scenario, the theft of cash does not involve any deferral of revenue recognition.
- Therefore, it does not fall under deferred revenue loss.
**3. Capital Loss:**
- A capital loss occurs when there is a decrease in the value of a capital asset, such as cash, inventory, or property.
- In this case, the theft of cash results in a direct decrease in the value of the cash asset held by the business.
- Since cash is considered a capital asset, the loss caused by its theft is classified as a capital loss.
**4. None of the Above:**
- This option is not applicable as the loss can be categorized as a capital loss.
In conclusion, the theft of cash by a cashier after business hours is considered a capital loss as it directly reduces the value of the cash asset held by the business.
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Loss caused by theft of cash by cashier after business hours is a :a)Revenue lossb)Deferred revenue lossc)Capital lossd)None of the aboveCorrect answer is option 'C'. Can you explain this answer?
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