Capital receipts are shown in _____a)Profit and Loss accountb)Balance Sheetc)Trading accountd)None of theseCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

► Capital receipts can be found in the balance sheet.

► Revenue receipts can be found in the income statement.

► Capital receipts either reduce the assets of the company or create liability for the company.

Answer

Capital receipts are those receipts of the business which creates the liability for business.So,it will be shown in balance sheet on the capital and liability side. For eg,loan received.

Answer

Balance sheet

Answer

B

Answer

Capital receipts are shown in the balance sheet in the liability side because receipts are nothing but payment due tomorrow.... ie we should pay it... for eg : sundry creditors, loans ,outstanding expenses...... so b is the correct answer

Answer

As it is liabilities for us

Answer

Capital receipts are shown in the Balance Sheet.

Capital receipts are the funds raised by a company through the issuance of shares, debentures, loans, or any other long-term borrowing. These receipts represent the inflow of funds into the company, which increases its capital base and helps in financing its long-term investments and operations.

Balance Sheet:
The Balance Sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It consists of three main sections: assets, liabilities, and owner's equity. The assets represent what the company owns, the liabilities represent what the company owes, and the owner's equity represents the residual interest in the company's assets after deducting its liabilities.

Capital Receipts in the Balance Sheet:
Capital receipts are categorized as part of the owner's equity section in the Balance Sheet. They are shown under the subheadings of share capital, reserves and surplus, and long-term borrowings.

1. Share Capital: Share capital represents the funds raised by a company by issuing shares to shareholders. It is shown under the subheadings of equity share capital and preference share capital. The amount of share capital reflects the initial investment made by the shareholders into the company.

2. Reserves and Surplus: Reserves and surplus are the accumulated profits of a company that are retained within the business. These profits can be reinvested for future growth or distributed as dividends to shareholders. Capital receipts such as profits, share premium, and revaluation reserves are shown under this section.

3. Long-term Borrowings: Long-term borrowings include funds raised by a company through debentures, loans, or other forms of borrowing with a maturity period of more than one year. These capital receipts represent the long-term liabilities of the company and are shown under the subheadings of debentures, long-term loans, and other long-term borrowings.

Conclusion:
Capital receipts, which represent the funds raised by a company through the issuance of shares, debentures, loans, or any other long-term borrowing, are shown in the Balance Sheet. They are categorized under the subheadings of share capital, reserves and surplus, and long-term borrowings. The Balance Sheet provides a comprehensive view of a company's financial position and helps stakeholders assess its solvency, liquidity, and overall financial health.

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