© examsnet.com
Question : 9
Total: 19
Is the following a revenue receipt or a capital receipt in the context of government budget and why?
(i) Tax receipts
(ii) Disinvestment
(i) Tax receipts
(ii) Disinvestment
Solution:
(i) Tax receipts are revenue receipts as these receipts neither creates any liability nor it creates any reduction in the assets of the government.
(ii) Disinvestment is treated as capital receipts because it results in the reduction of government assets.
(ii) Disinvestment is treated as capital receipts because it results in the reduction of government assets.
© examsnet.com
Go to Question: