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: Classified as a Revenue Receipt due to its nature as consistent income derived from government investments.
Sale of Shares: Classified as a Capital Receipt as it represents the divestment of government assets. 
Debt Repayment: Classified as a Capital Receipt due to its effect of decreasing government liabilities.