There are two types of incomes of a non-trading concern :
1. Revenue incomes and
2. Capital incomes.
1. Revenue income: Incomes received for the regular activities of the concern are known as revenue incomes or receipts. Revenue incomes are those incomes without which the activities of the concern cannot be carried out.
Illustrations: Admission fees of members, Subscriptions, Interest on investments, Incomes from various activities, Locker’s rent, Rent of hall, Government grant or subsidy, Income from entertainment programme, Small amounts of donations or charity, Sale of old newspaper, Sale of sports equipment, Discount, Commission, etc. The revenue incomes or receipts are recorded on the credit side of Income and Expenditure Account. The objective of revenue incomes are to procure regular income.
2. Capital incomes: The incomes which are not received regularly or repeatedly and whose benefit is going to be received by the concern for a longer period, are known as capital incomes or receipts.
Illustrations: Donation, Charity, Subscription received for life membership, Amount of loan taken, etc. Profit arising from the sale of fixed asset is a capital income but it is generally credited to Income-Expenditure Account instead of adding to capital fund. Generally in non-trading concerns except borrowings capital incomes such as donations, legacy, etc. are added in capital fund or are shown separately from capital fund on liabilities side of a Balance Sheet. The objective of capital income is to procure long term fund.
