Which of the following is not a capital

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Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:

Which of the following is not a capital profit for the company?

Options:

Profit prior to incorporation of the company

Profit from the sale of fixed assets

Premium on issue of shares

Compensation received on the termination of a sales contract

Correct Answer:

Compensation received on the termination of a sales contract

Explanation:

Any profit made out of such a contract or any compensation received for wrongful termination of it is a revenue income and not a capital receipt.