What is Capital Income?

Capital Income: Capital incomes are those incomes that do not arise in the normal course of business operations. Such incomes arise from the capital itself, without involving any production work. For example, premium received from the issue of shares or debentures.


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What is Capital Expenditure?

The capital expenditure results in an income or benefits for a longer period that extends for a period of more than a year. This expenditure is shown in the Balance Sheet

What is a Promissory Note?

A promissory note is an unconditional promise in writing given by the buyer (or creditor) to the seller (or debtor) to pay the amount of money specified therein to the seller or to the order of seller or to bearer.

What are Capital Reserves?

The reserves that are created out of the capital profits of a business are known as Capital reserves. Capital profits are the profits that are not earned in normal business activities.

What are Secret Reserves?

Secret reserves are those reserves that exist in the business to strengthen its financial position but are not disclosed in the Balance Sheet.