Revenue Loss And Capital Loss
Revenue loss is loss realized from sale of goods or services at selling price which is lower than cost.
Revenue loss and capital loss. Revenue losses arise from the normal course of business by selling goods or by providing services less than its cost price on inventory value less than its cost. In order to ascertain the loss incurred by a firm it is important to distinguish between capital losses and revenue losses. Embezzlement of goods by the storekeeper. Loss on sale of fixed asset is an example for capital loss.
Loss on sale of fixed asset is an example for capital loss. Capital profits and revenue profits with examples explained revenue losses. Capital and revenue losses should never be confused with each other as it can lead to classification errors and result in an incorrect financial summary report. Capital losses are the losses which arise not from the normal course of business.
Capital loss occurs due to the sale of assets share and debentures at. Embezzlement of cash by the cashier. It is realized through carrying out the normal business of a company. Followings are the main differences between capital loss and revenue loss.