Classify the following into capital receipts and revenue receipts. Give reasons for your answers. (i) Recovery of loans
Classify the following into capital receipts and revenue receipts. Give reasons for your answers.
(i) Recovery of loans
(ii) Interest received on loans
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Recovery of Loans-It is a Capital Receipt, it leads to decline in the financial assets of the government.
Interest received on Loans-It is a Revenue Receipts because it neither create a liability nor reduces the assets.
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