Match the following: 1. Revenue

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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

Match the following:

1.	Revenue receipts	A.	Receipts that create liability or reduce assets
2.	Revenue expenditure	B.	Receipts which do not lead any claim on the government
3.	Capital receipts	C.	Expenses which result in creation of asset or reduction in liability
4.	Capital expenditure	D.	Expenses which neither create assets nor reduce liability

Options:

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

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

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

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

Correct Answer:

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

Explanation:

The correct answer is Option 4: 1-B, 2-D, 3-A, 4-C

1.	Revenue receipts	B.Receipts which do not lead any claim on the government
2.	Revenue expenditure	D.Expenses which neither create assets nor reduce liability
3.	Capital receipts	A.Receipts that create liability or reduce assets
4.	Capital expenditure	C.Expenses which result in creation of asset or reduction in liability

Revenue receipts are those receipts that do not lead to a claim on the government. They neither create liability nor reduces the assets of the government.
Capital receipts refers to those receipts which either result in creation of liability or in reduction of assets. For example: sale of shares of SBI to HDFC bank will result in the reduction of assets of the government.
Revenue expenditure are those expenses which neither creates assets nor result in reduction of liability. For example: salaries etc. paid by the government.
Capital expenditure are those expenses which either results in the creation of assets or reduction in liability of the government. For example: Payment of loan, Purchase of shares.