Capital loss is related to fixed assets and long-term liabilities.
Revenue loss is related short-term and day to day activities.
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු =
When organization sales fixed assets at less than book value or issues shares and debentures at discount, it is known as capital loss.
It occurs only when fixed assets are sold or capital raise.
Generally, it is shown is assets side of balance sheet.
It can be written off out of capital profit.
Suppose BL Traders has an old machine valued Rs 150,000.
This machine was sold for Rs 120,000.
Here, capital loss is (Rs 150,000 – Rs 120,000) Rs 30,000.
Some other capital losses are:
a. Loss on sales of fixed assets.
b. Loss on sales of investment.
c. Discount on issue of share and debentures.
d. Premium on redemption of debentures etc.
###########
Click on link for YouTube videos
ACCOUNTING EQUATION http://tiny.cc/c89jkz
BASIC JOURNAL ENTRIES IN NEPALI http://tiny.cc/uaakkz
BASIC JOURNAL ENTRIES http://tiny.cc/8aakkz
JOURNAL ENTRY AND LEDGER http://tiny.cc/caakkz
LEDGER http://tiny.cc/haakkz
SUBSIDIARY BOOK http://tiny.cc/399jkz
CASH BOOK http://tiny.cc/889jkz
TRIAL BALANCE & ADJUSTED TRIAL BALANCE http://tiny.cc/c59jkz
BANK RECONCILIATION STATEMENT (BRS) http://tiny.cc/q59jkz
DEPRECIATION http://tiny.cc/ugakkz
FINAL ACCOUNT: CLASS 11 http://tiny.cc/y89jkz
ADJUSTMENT IN FINAL ACCOUNT http://tiny.cc/keakkz
CAPITAL AND REVENUE http://tiny.cc/peakkz
SINGLE ENTRY SYSTEM http://tiny.cc/n19jkz
NON-PROFIT ORGANIZATION (NON-TRADING CONCERN http://tiny.cc/j09jkz
GOVERNMENT ACCOUNTING http://tiny.cc/hcakkz
GOSWARA VOUCHER (JOURNAL VOUCHER) http://tiny.cc/hcakkz
###########
When organization sales goods or service less than purchase value or operating expenses are more than value of goods sold, it is known revenue loss.
Revenue losses occur due to inefficiency of management.
It is shown is debit side of profit and loss account.
Some revenue losses are:
a. Sales of goods at less than purchased value.
b. Provide service at less than hired value.
c. Loss by fire or theft etc.
Bases |
Capital loss |
Revenue loss |
Nature |
It does not occur in normal business operation. |
It occurs in normal business operation. |
Causes |
It occurs due to sales of fixed assets at loss or issue of shares and debentures at discount. |
It occurs due to heavy operating expenses but low turnover/sales. |
Indication |
It does not indicate inefficiency of business. |
It indicates inefficiency of business. |
Show |
It is shown in assets side of balance sheet. |
Generally, It is shown in debit side of profit and loss account. |
***********
Thank you for investing your time.
Please comment on article.
You can help me by sharing this article at your social media platform.
Jay Google, Jay YouTube, Jay Social Media
जय गूगल, जय युट्युब, जय सोशल मीडिया