21 September 2013
Q1)Whether following are Capital Expenditure or revenue Expenditure? 1)Cash paid to creditors Bills payable paid Q2)Whether following items are Revenue receipts or Capital Receipts? 1)Collection from Debtors 2)Bills Receivable Honoured.
21 September 2013
Cash paid to directors and Bills Payables paid are neither Capital expenditure nor Revenue expenditure. These are the payments against which liability is set off.For eg:- Purchase A/c Dr.............. To Creditors Aic................
Creditors A/c Dr............... To Cash/Bank
In the similar way Collection from debtors and Bills receivables honoured are neither Revenue receipts nor Capital receipts. These are collections against debts:- Debtors A/c Dr......... To Sales
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