Q.Which of the following is a Capital Receipt?
(A) Cash received from sale of goods
(B) Interest received on a fixed deposit
(C) A bank loan raised for expanding the business
(D) Commission received for services rendered

A bank loan is a non-operating receipt that increases a liability, unlike the other three, which are all earned from the business's normal operating activity.

A Capital Receipt is one not earned from the normal trading/operating activity of the business — a loan raised is the standard example, since it increases a liability rather than being earned income.

Option-by-option analysis:

• (A) Incorrect — sale of goods is the primary Revenue Receipt of a trading business.
• (B) Incorrect — interest received is a regular, recurring Revenue Receipt. …