Question

With valid reasons, classify the following into Capital Receipts or Revenue Receipts of the government: Dividend received by the government from a Maharatna company. Receipts of the government from the sale of shares of a Public Sector Undertaking (PSU) in the open market. Debt cleared by the Sri Lanka Government to the Indian Government.

Hint:

Revenue receipts are recurring incomes, while Capital receipts involve non-recurring changes in assets or liabilities.

Answer 1

Dividend: This is a Revenue Receipt as it is a regular income for the government from its investments. 
Sale of Shares: This is a Capital Receipt as it involves the sale of government assets. 
Debt Repayment: This is a Capital Receipt as it reduces the liabilities of the government.