BUSINESS ADMINISTRATION
BUSINESS ENVIRONMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Capital Budget
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Revenue Budget
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Income from Exports
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Donations
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Detailed explanation-1: -Loan Received from Foreign Government is Capital Budget because it is Capital Revenue of government and capital revenue refers to that government revenue, which causes increase in the government liabilities as well as reduction in assets for the government.
Detailed explanation-2: -Capital Budget consists of capital receipts (like disinvestment, borrowing, loans from public or foreign governments, Reserve Bank of India, etc) and capital expenditure (like expenditure on development of machinery, health facilities, etc).
Detailed explanation-3: -Sale of shares of a Public Sector Undertaking (PSU) to X Limited (Private Company) is a capital receipt in the Government Budget.
Detailed explanation-4: -Repayment of debt is a capital expenditure because it decreases the liability of the government. Q. Very short answer type question: Why is repayment of loan a capital expenditure?
Detailed explanation-5: -Accrual principle is not followed in capital budgeting.