Receipts can be classified in two ways:
- Capital receipts:The amount which we receive from the sale of fixed assets is known as capital receipts. Capital receipts are shown in the liabilities side of balance sheet only.These receipts are capital in nature.
- Revenue receipts: Revenue receipts are the routine receipts of the business just as receipt from sale of goods. Revenue receipts are shown at the credit of either trading account or profit and loss account.
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