Gunjan Mahajan posted an Question
September 09, 2021 • 16:55 pm 30 points
  • UGC NET
  • Commerce

Deferred revenue expenditures

please explain me this and revenue receipt and capital receipt in short

1 Answer(s) Answer Now
  • 0 Likes
  • 1 Comments
  • 0 Shares
  • Rucha rajesh shingvekar Best Answer

    Deferred revenue, also known as unearned revenue, refers to advance payments a company receives for products or services that are to be delivered or performed in the future. The company that receives the prepayment records the amount as deferred revenue, a liability, on its balance sheet. For example, revenue used for advertisement is deferred revenue expenditure because it will keep showing its benefits over the period of two to three years. Capital Receipts appears on the liabilities side of the Balance Sheet whereas Revenue Receipts appears on the credit side of the Profit and Loss Account as income for the financial year. The capital receipt is received in exchange for the source of income. Unlike revenue received which is a substitution of income.

    cropped785814758875255690.jpg
whatsapp-btn

Do You Want Better RANK in Your Exam?

Start Your Preparations with Eduncle’s FREE Study Material

  • Updated Syllabus, Paper Pattern & Full Exam Details
  • Sample Theory of Most Important Topic
  • Model Test Paper with Detailed Solutions
  • Last 5 Years Question Papers & Answers