Question:
Interest received on loan.
Interest received on loan.
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Revenue receipts are regular inflows that do not impact assets or liabilities, whereas capital receipts involve transactions that alter the financial structure of the government.
Updated On: Feb 19, 2025
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Solution and Explanation
{Classification:}
Interest received on a loan is classified as a {Revenue Receipt}.
{Justification:}
- Revenue receipts are those that neither create liabilities nor lead to a reduction in assets.
- Interest on loans is a recurring income for the government and does not affect its financial assets or liabilities. {Conclusion:} Since interest is a periodic income, it falls under revenue receipts.
- Revenue receipts are those that neither create liabilities nor lead to a reduction in assets.
- Interest on loans is a recurring income for the government and does not affect its financial assets or liabilities. {Conclusion:} Since interest is a periodic income, it falls under revenue receipts.
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