Question

Give two/three uses of Receipts and Payments Account.

Mention any two uses of Receipts and Payments Account. 

Answer 1

The main uses of Receipts and Payments Account are as follows: 

1. Receipts and Payments Account serves as the basis for preparing the Income and Expenditure Account and the Balance Sheet.
2. It alerts the management of a non-trading organisation about decline in cash receipts and increase in cash payments.
3. It informs the members about main sources of income and major items of payments of their organisation.