The profit earned by a company on which of the following is called Capital Profit?

  1. Sales of fixed assets
  2. Sale of goods and services
  3. Premium on issue of shares

Select the correct option from the codes given below:

Answer: [C] Only 1 & 3

Capital Profits are those profits which are not earned in the normal course of the business. Some examples are as follows: Profit on sale of fixed assets; Profit on revaluation of fixed assets; Premium on issue of shares and debentures; Profit on redemption of debentures; Profit earned by the company prior to its incorporation. Reference

This question is a part of GKToday's Integrated IAS General Studies Module