Which one of the following receipts is of revenue nature?

Correct option is B

The correct answer is (b) Dividend received on investment.
Explanation Revenue receipts are recurring incomes earned from day-to-day business activities or investments that do not create a liability or reduce the assets of the firm. Dividend received is a periodic return on capital invested, making it a classic example of revenue nature. In contrast, capital receipts are non-recurring and usually involve the sale of fixed assets or raising loans.
Information Booster
· Recurring Nature: Revenue receipts occur regularly during an accounting period.
· No Asset Reduction: Unlike selling an investment, receiving a dividend doesn't decrease your holding.
· Income Statement: These items are credited to the Profit and Loss Account.
· Operational Flow: They maintain the earning capacity of the business rather than changing its capital structure.
Additional Knowledge
· Amount realised from the sale of investments: This is a capital receipt as it reduces a fixed asset.
· Amount borrowed from a bank: This is a capital receipt because it creates a financial liability.
· Compensation for land acquisition: This is a capital receipt as it is a non-recurring payment received in exchange for a permanent asset (land).