Match the following: 1. Direct t

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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

Match the following:

1.	Direct tax	A.	Capital receipt
2.	Recovery of loan	B.	Capital expenditure
3.	Expenses incurred to collect income tax	C.	Revenue receipt
4.	Loan granted to Kerala government	D.	Revenue expenditure

Options:

1-C, 2-A, 3-D, 4-B

1-B, 2-C, 3-D, 4-A

1-A, 2-C, 3-B, 4-D

1-D, 2-A, 3-C, 4-B

Correct Answer:

1-C, 2-A, 3-D, 4-B

Explanation:

Revenue receipts are of 2 types: Tax receipts (collections of taxes), Non tax receipts ( interest, dividends received etc.)
Capital receipts refers to those receipts which either result in creation of liability or in reduction of assets. Recovery of loan will result in reduction of assets.
Revenue expenditure includes expenses incurred on regular basis like expenses on collection of taxes.
Capital expenditure results in reduction of liability or increase in assets. Loan granted to Kerala government will increase the assets of the government.