Capital and Revenue Receipts Worksheet.

The following Capital and Revenue Receipts worksheet -2 covers all the aspects of Capital and Revenue Expenditure and Receipts.  This Capital and Revenue Receipts worksheet has been prepared based on CIE past papers and CIE syllabus for O levels & AS levels. Hence, independent practice of these worksheets (Worksheet-1 and Worksheet-2) boost the pupil's confidence and morale.  As answers are not provided for these worksheet questions, you may use the comments section below or forum on this website to discuss difficult aspects of this worksheet.  We love to help you if you have any difficulty in practising this worksheet. Educators may download these worksheets (Printable PDF form) from resources section of this website for classroom use. 

Capital and Revenue Receipts Worksheet - 2.

A.   Classify the following receipts as either capital receipts or as revenue receipts.

1.  Amount received from the sale of inventory.
2.  Amount received on account of the issue of fresh share capital.
3.  Amount received from the issue of debentures.
4. Sales commission received from the manufacturer.
5. Amount received in the form of general donations.
6. Cash discount received from the supplier for the prompt payment.
7. Long term loan received from the Nordea Bank.
8. Interest received on deposit account from Bank of Singapore.
9. Amount received in the form of specific donations to improve Research and Development facilities in the organization.
10. Amount collected in the form of a premium on shares.

B.   Classify the following transactions either as a capital receipt or as a revenue receipt.

1. Received commission.
2. Received investment income.
3. Sale of a motor vehicle.
4. Received interest on deposit account from DBS Bank Limited.
5. Took out a 12-year bank loan from The Islamic Bank of Asia.
6. Cash received from the sale of inventory.
7. Staff donated seven days salary for the construction of Staff recreation facility in the business premises.
8. Cash discount received while settling a debt from a supplier.
9. Sale proceeds of old office equipment.
10. Rent received from sub-let of office.

C.   Indicate which of the following would be Capital expenditure, Capital receipt, Revenue expenditure and Revenue receipt.

1. Purchase of motor vehicle.
2. Rent paid on premises.
3. Rent received from sub-let of premises.
4. Petrol costs for the motor vehicle.
5. Costs incurred to put extra headlights to a motor vehicle.
6. Wages paid to the motor vehicle driver.
7. Wages paid to own staff for constructing new staff room in the premises.
8.  Amount received from disposal of the old motor vehicle.
9. Commission received on sale of inventory on a consignment basis.
10. Legal costs of buying property for factory use.

D. Out of the following expenditures and receipts, which is (i) capital expenditure (ii) revenue expenditure (iii) capital receipts and (iv) revenue receipts?

1. Purchase of equipment.
2. Freight paid on equipment for bringing it to the factory.
3. Sale of old factory equipment.
4. The overhauling expenses of old equipment.
5. Funds generated by the issue of debentures.
6. Wages paid for the installation of equipment.
7. Repairs to factory equipment.
8. Legal charges paid for the purchase of factory land.
9. Monthly aid received from the government for the welfare of the factory workers.
10. Payment of architect’s fee for new factory building design.

E. The following financial statements, which contain errors, were prepared by a newly joined bookkeeper.

Income Statement for the year ended 30 September 2017.

Statement of financial position as at 30 September 2017.

REQUIRED:

1. From the above financial statements identify the capital and revenue expenditure and receipt items which have been treated incorrectly. Explain where each of these incorrectly treated items should have been included in the financial statements.
2. For the year ended 30th September 2017, calculate the corrected Profit.    

End of Capital and Revenue Receipts worksheet (2).

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