Which item is a capital receipt for a government?
Correct answer: A. Proceeds from selling a government asset
- A. Proceeds from selling a government asset
- B. Income from a government administrative fee
- C. Profit from a publicly owned trading service
- D. Revenue collected through a general sales tax
Explanation
Capital receipts either create a liability or reduce a government asset, so proceeds from asset sales fall in this category. Fees, profits and sales taxes are normally treated as current or revenue receipts.
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About Public Finance
Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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