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Profit on Sale of fixed assets is capital receipt?
Accountancy
Profit on Sale of fixed assets is capital receipt?
Answers (13)
Gaurav Choubey
Receipt on account of the sale of fixed asset is called capital receipt unlike revenue receipt which is the amount realised by sale of goods and services.
In which account capital receipt is recorded??
ShownCapital receipts are shown on the liabilitiesRevenue receipts are shown at the credit of side of balance sheet. either trading account or profit and loss account. ExamplesSale of fixed assets, capital contribution andProfit on sale of assets, sale of goods.
Gaurav Choubey
ShownCapital receipts are shown on the liabilitiesRevenue receipts are shown at the credit of side of balance sheet. either trading account or profit and loss account. ExamplesSale of fixed assets, capital contribution andProfit on sale of assets, sale of goods.
But in ICAI module profit on sale is shown under Cr side of p&l a/c
Thread Starter
Atharv SankliyaBut in ICAI module profit on sale is shown under Cr side of p&l a/c
Profit is recorded in p&l But proceeds in cash is recorded as asset
CA Suraj Lakhotia Admin
Profit on sale of fixed assets is capital in nature.
So why profit from sale of assets is recorded in p&l a/c
Thread Starter
Atharv SankliyaSo why profit from sale of assets is recorded in p&l a/c
The profit portion represents gain and hence recorded in P&L
CA Suraj Lakhotia Admin
The profit portion represents gain and hence recorded in P&L
Ok mean this profit is not capital profit ?