Assertion (A): Recovery of loans is a capital receipt.
Reason (R): Recovery of loans creates a liability for the government.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

A is true: recovery reduces an asset (the loan), so it is a capital receipt.
R is false: getting a loan repaid creates no liability.

Concept: Why recovery is a capital receipt
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsCapital receipts

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Ten questions from Government Budget: Receipts & Expenditure, at your own pace.

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Assertion (A): Recovery of loans is a capital receipt.Reason (R): Recovery of loans creates a liability for the government.

Explanation

Assertion (A): Recovery of loans is a capital receipt.
Reason (R): Recovery of loans creates a liability for the government.