Capital receipts comprise of payments for contributions into the business by the proprietor, partners or shareholders (in the case of a joint stock company) towards the capital of the firm and also any sums received from debenture holders, any loan and the proceeds of sale of any fixed assets of a business enterprise (not being in the nature of a normal sale).
Revenue receipts or incomes are the outcome of firm’s activity in the accounting period, part of its rewards for offering goods or services to the public e.g., sales, commissions and fees received for services rendered, interest on any investment, discounts received etc. And such items are revenue receipts and must be set off against the revenue expenses in order to calculate the profit or loss of the business in an accounting period. A receipt of money when a loan or mortgage on property in arranged is like a contribution of capital to the business by someone outside the business, not the proprietor or partners shareholders. It is regarded as a capital item but the interest charged for the use of the money will be revenue expense of the period in which it becomes due.

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